FAQ

Introduction

What is the voluntary carbon market?

The voluntary carbon market enables the purchase of carbon credits on a voluntary basis. Companies use these markets to offset their emissions in alignment with sustainability goals rather than compliance with mandatory regulations.

What are carbon credits?

Project-based carbon credits represent the reduction or removal of one metric ton of carbon dioxide or its equivalent in other greenhouse gases. These credits can be traded or sold, allowing entities to offset their emissions.

Who issues a carbon credit?

A carbon credit is issued by a carbon crediting program or “standard”. Carbon crediting programs perform three basic functions: (1) develop and approve methodologies for issuance of carbon credits; (2) review projects and credits against these methodologies, with oversight from third-party auditors (VVBs); and (3) operate registry systems that issue credits and track how they are used.

Why do companies buy carbon credits?

Companies buy carbon credits for several reasons, including aligning with global sustainability standards, enhancing their market image, and pre-empting future regulatory changes that might impose stricter emission constraints.

What is offsetting?

Offsetting is when a company retires a carbon credit to compensate for its operational emissions.

How effective is carbon credit trading as a tool to fight climate change?

Carbon trading assigns a monetary value to the cost of emitting carbon and the cost of reducing carbon emissions, creating a financial motivation for reductions and investments. International carbon trading can stimulate politicians and businesses to prioritise the lowest cost emissions reductions first, wherever they may be, maximizing efficiency in addressing climate change. In contrast, without carbon trading, companies are very limited in the scope of their emissions reductions activities as they can only address climate change specifically within their own operations, even if the costs of doing so are prohibitive.

What is the climate change mitigation hierarchy and how does offsetting fit in it?

The mitigation hierarchy outlines steps to address greenhouse gas emissions: (1) avoid emissions through energy efficiency and conservation, (2) reduce emissions by changing business practices, (3) substitute high-carbon energy sources with low-carbon where possible, and (4) offset remaining emissions. Carbon offsetting acts as a supplementary mechanism within broader climate change mitigation strategies. A 2023 study by Ecosystem Marketplace found that companies purchasing carbon credits are more likely to reduce their greenhouse gas emissions year-on-year than non-buyers[1].

How can individuals participate in voluntary carbon markets?

Individuals can buy carbon credits to offset their personal emissions, such as those from travel, home energy use, or other activities. Various platforms offer individuals the opportunity to contribute to projects directly, but we recommend the Gold Standard marketplace: https://marketplace.goldstandard.org/collections/projects/products/tasc-improved-cookstoves-rural-zambia

What does the term “carbon neutral” mean?

Carbon neutrality signifies that an entity has balanced its greenhouse gas emissions by purchasing an equivalent amount of carbon credits and using them to offset the emissions for a particular period. It can apply to the emissions of a company, department, product, event, or any entity.

What does Net Zero mean? How does it differ from carbon neutrality?

Net Zero, as defined by the Science Based Targets initiative (SBTi), refers to reducing greenhouse gas (GHG) emissions from human activities to as close to zero as possible. Beyond achieving deep decarbonization, any remaining GHG emissions are balanced with an equivalent amount of carbon removal. According to SBTi, to claim Net Zero, a company must set science-based targets aligned with limiting warming to 1.5°C, reduce its emissions by at least 90-95%, and neutralize the impact of any residual emissions.

In contrast, carbon neutrality permits the use of carbon credits as offsets for some or all operational emissions. Carbon neutrality may be achieved by offsetting any amount of carbon emissions with an equivalent amount of carbon offsets, without necessarily reducing emissions first, however in practice it is usually achieved through a combination of operational emissions reductions, other environmental commodities (like renewable energy procurement) and carbon offsetting.

What are co-benefits, and why are they important in carbon credit projects?

Co-benefits such as biodiversity enhancement and local community development increase the overall value of carbon credit projects, making them more appealing and impactful. Often co-benefits are measured by reference to the Sustainable Development Goals (SDGs). For example, improved cookstove projects like those implemented by TASC are frequently validated as contributing toward SDGs like (1) No Poverty, (3) Good Health and (5) Gender Equality. This is because improved cookstove programs create social impacts that are or equal or perhaps even greater impact than the climate benefit of reducing wood fuel consumption.

What are retirement and cancellation of carbon credits?

Retirement refers to the use of a carbon credit to offset emissions, effectively removing it from the market. Cancellation ensures a credit cannot be reused or resold but is neither to be used as an offset.

What is the difference between emissions removals, emissions reductions and avoided emissions?

• Emissions reductions – refer to actions that decrease the amount of greenhouse gases released from a specific source compared to a baseline scenario, such as upgrading to more energy-efficient technologies.
• Avoided emissions – involve activities that prevent emissions from occurring that would have otherwise happened under a business-as-usual scenario, like preserving a forest that was scheduled for logging.
• Emissions removals – describe processes that actively remove greenhouse gases from the atmosphere and sequester them, such as through afforestation or carbon capture and storage technologies.

Are removals, reductions and avoidance of equal importance or are certain projects better than others?

The effectiveness of emissions removals, reductions, and avoided emissions may be compared on measures of environmental integrity, implementation, and cost. Emissions reductions are endorsed for their immediacy, however there can be challenges with implementation costs for the change in activity and the measurement and reporting.

Avoided emissions offer tremendous scalability – think of the impact of saving a rainforest or closing a coal-fired power plant – however there have been big challenges measuring the additionality, establishing a credible baseline, and accounting for potential leakage—emissions moving from one area to another.

Finally, emissions removals offer an attractive vision of an advanced society that has mastered the carbon cycle, finding natural and man-made techniques to sequester as many GHG emissions as we create. If we drill down in more detail, removals should be divided into nature-based removals – like afforestation or biochar projects – and technical removals projects like carbon capture and storage. Nature-based projects, like their counterparts in the category of avoided emissions, can offer phenomenal scalability and co-benefits, however implementation costs and payback periods are often unattractive to commercial lenders. The most forward-looking solutions – technical removals – are celebrated by technologists and futurists however in practice they are constrained by technological limits, astronomical costs, and questions about their long-term viability.

If we take a critical look at all the approaches, we can see that no single approach suffices on its own. In the short run it is most cost effective and practical to focus on reducing emissions and avoiding emissions. In the long run some removal projects must be financed because there is no evidence that advanced civilisation can continue without the creation (and removal) of some greenhouse gas emissions.

How do developers secure funding for carbon credit projects?

Funding can be secured through a variety of sources, including private investors, public grants, and pre-sales of carbon credits. Developers often need to present robust project plans and validation reports to attract financing.

Market

How do voluntary carbon markets differ from compliance carbon markets?

In contrast to compliance carbon markets, which operate under government mandates requiring emissions reductions, voluntary markets are not legally enforced. Examples include the European Union Emissions Trading System (EU ETS) and the California Cap-and-Trade Program, which both aim to reduce greenhouse gas emissions by setting emission limits and allowing trading of emission allowances.

What is a cap-and-trade system and how does it compare to project-based carbon credit trading?

Cap-and-trade systems set a total cap (or limit) on total emissions and companies operating within the cap buy or sell permits to emit GHG emissions. The limited supply of permits creates a financial incentive to reduce emissions, as companies with lower emissions can profit by selling their extra permits to higher emitters. The largest cap-and-trade market is the EU ETS.

Cap-and-trade systems and project-based carbon credit trading (like those traded in the VCM) are distinct mechanisms and effective in different contexts. Cap-and-trade systems set a firm limit on overall emissions, providing clear targets, and promoting broad compliance through the trading of allowances. This method is efficient for large heavy industries with predictable emissions patterns. In contrast, project-based credits encourage specific reductions or removals from targeting initiatives, such as reforestation or renewable energy projects. They are more appropriate as a mitigation tool for companies that have a more flexible global footprint and the ability to shift production easily from one country to another.

How is the price of carbon credits determined?

Pricing in the voluntary carbon market is influenced by several factors, including the quality of the offset, supply and demand, project type, location, the varying costs of implementing projects, and the perceived value of their co-benefits.

What are the most common standards for verifying carbon credits?

The Verified Carbon Standard (VCS), Gold Standard (GS), and the Clean Development Mechanism are the largest and longest established standards, though the latter is now on hiatus while the United Nations prepares its successor. Other established standards include the Climate Action Reserve (CAR), American Carbon Registry (ACR), Plan Vivo, Global Carbon Council (GCC) and Architecture for REDD Transactions (ART-TREES).

What are the criteria for a project to qualify for carbon credits?

Carbon credits must be developed under an existing methodology and program, or a methodology must be developed specific for the project type in question. Credits must also represent emission reductions that are additional, quantifiable, permanent, and verifiable. Projects must also ensure no negative externalities, such as social displacement or environmental damage, undermining their credibility. An example is large hydropower projects which, while once popular under the CDM, are no longer eligible under prevailing standards due to fears that these projects lead to the displacement of local communities and unintended local environmental impacts such as habitat and wildlife destruction.

How is additionality determined in carbon credit projects?

Additionality requires proof that the emissions reductions achieved by the project would not have occurred without the financial incentives provided by the sale of carbon credits, often evidenced by overcoming significant barriers.

What are the risks associated with buying carbon credits?

The primary risks include the potential for investing in projects that fail to deliver the expected environmental impact, the possibility of fraud in credit issuance, and market volatility. Due diligence and selecting credits verified by stringent standards are essential to mitigate these risks.

How do registries and verifiers ensure the quality of carbon credits?

Registries provide a permanent electronic record of the creation (or “issuance”), trade and use of carbon credits to provide stakeholders with transparent access to information and to prevent double counting. Validation and verification bodies (VVBs) ensure the projects comply with carbon credit methodologies and program rules to ensure genuine environmental impact.

What role do brokers and consultants play in the voluntary carbon markets?

They offer expertise in navigating the market, often pairing services related to the procurement of other environmental commodities – such as renewable energy, green gas, or compliance carbon credits – with support in voluntary carbon markets. Consultants will usually assist a company to calculate its carbon footprint and offer other sustainability services in addition to selling carbon credits to help their clients achieve targets.

Project Cycle

What are the steps for creating a carbon credit?

• Select a peer reviewed methodology from a carbon crediting program, also known as a Standard.
• Open an account with the program and submit all required documents, including a draft project description that is open for a 30-day public commenting period.^[2]
• After the comment period, complete a project design document that is reviewed by a certified third-party auditor to determine whether the project meets the rules and requirements of the Standard.
• The third-party auditor’s assessment is reviewed by the Standard’s technical review committee.
• If approved, the project developer submits their carbon credit project for registration and then monitors and measures emissions reductions or removals for an initial monitoring period.
• The project is then verified by an independent, third-party that submits a report to the technical review committee.
• Once verification is approved by the Standard, the project submits a request for an issuance of credits.
• Once issued, each credit is assigned a unique serial number and tracked in a secure, public registry.

What types of projects generate carbon credits?

Projects that generate carbon credits include household energy efficiency programs like improved cookstoves or water filters, renewable energy installations, forest conservation, methane capture from landfills, and agricultural programs that sequester carbon.

What is a carbon credit methodology and what is its purpose?

A carbon credit methodology establishes guidelines for measuring and validating greenhouse gas reductions or removals from a particular project. Its purpose is to ensure accuracy and consistency in quantifying the environmental benefits of a particular type of activity. For example, The Gold Standard “TPDDTEC” methodology is indeed designed for decentralised energy efficiency projects, like those which replace traditional biomass cooking stoves with cleaner and more efficient alternatives in developing countries.

How are baselines calculated for carbon credit projects?

Baselines are calculated by establishing a scenario that measures or estimates emissions in the absence of the project. This involves historical data analysis, consideration of regional developmental trends, and measuring or modelling similar activities in the project area. The baseline must be conservative and well-documented to ensure credibility.

How do developers ensure the additionality of a carbon credit project?

Additionality in carbon credit projects is measured by demonstrating that the carbon reduction would not have occurred without the financial incentive provided by the carbon credits. This involves a counterfactual analysis where project developers must prove that their project’s emissions reductions are above and beyond what would have happened under a “business as usual” scenario. This often requires showing that the project is not mandated by law, is not financially viable without the sale of carbon credits, and represents a real, measurable, and verifiable change in emissions compared to a baseline scenario.

How is leakage accounted for in carbon credit projects, and what techniques are employed to mitigate it?

Leakage refers to the unintended increase in GHG emissions outside the project boundary as a direct result of the project activities. It is accounted for by conducting thorough assessments of potential off-site impacts and implementing buffer zones or similar measures. It may be mitigated by adjusting the baseline or using percentage deductions from the total carbon credits generated to compensate for leakage.

How are permanence and risk of reversal addressed in the project design of carbon sequestration initiatives?

Permanence and risk of reversal are addressed by designing projects with legal and financial mechanisms to protect the crediting/project area. Many standards require the establishment of risk mitigation buffers, where a portion of carbon credits is set aside to address potential losses from events like wildfires or economic shifts that might release sequestered carbon back into the atmosphere.

What role does project validation play in the carbon market?

Validation is where a VVB assesses the project design document, including the baseline scenario, the monitoring plan, and the projected emission reductions. This assessment ensures the project meets all the program and methodology criteria for generating carbon credits from the specified project activity. Validation is required to register the project with the carbon credit standard or program.

What is involved in the monitoring and reporting phase of a carbon credit project?

Once a project is operational, ongoing monitoring and reporting are required to track the actual emission reductions achieved. This involves collecting data according to the prescribed protocol in the project design document and ensuring that activities adhere to defined parameters. The data must be accurate and robust, as it forms the basis for issuing carbon credits.

How are carbon credits verified after a project is implemented?

After the monitoring period, a project undergoes verification where the VVB reviews the reported data to confirm that the emission reductions recorded in the monitoring report are real, measurable, and aligned with the PDD and validation reports. Verification is required to proceed with an issuance request.

What challenges can arise during the carbon credit project lifecycle?

Challenges in the project lifecycle can include changes in regulatory frameworks, technological or logistical issues, unforeseen environmental impacts, and shifts in economic or political conditions that may affect project viability. Additionally, ensuring continuous stakeholder engagement and managing community expectations can be complex but essential for sustained project success.

When is a carbon credit project closed or terminated?

Project closure will occur when a project reaches the end of its crediting period or fails to comply with its validation or verification criteria continuously. A project may also be terminated early if it is no longer viable or fails to meet its financial objectives.

What is a crediting period?

A crediting period is the duration during which a project can generate carbon credits, typically ranging from several years to a decade. The length is determined by the methodology. Some are fixed and non-renewable. Others are renewable for one or more periods of even length – i.e., three five-year periods. At each renewal period the project design and validation will be reviewed to assess whether it is fit to continue as it is or whether the implementation should be updated for the new period.

Governance

What are GHG emissions scopes?

Greenhouse gas (GHG) emissions are categorized into three scopes by the Greenhouse Gas Protocol for clarity and consistency in reporting and management. Scope 1 covers direct emissions from owned or controlled sources, such as company vehicles and facilities. Scope 2 includes indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company. Scope 3 encompasses all other indirect emissions that occur in a company’s value chain, including both upstream and downstream activities, such as the production of purchased materials, business travel, and the use of sold products.

What is the Integrity Council for the Voluntary Carbon Market (ICVCM)?

The Integrity Council for the Voluntary Carbon Market (ICVCM) aims to ensure the integrity of voluntary carbon markets by setting robust quality standards. Last year it launched the Core Carbon Principles (CCPs), which are designed to enhance the credibility and environmental integrity of carbon credits. The ICVCM’s next steps involve finalizing and implementing the Core Carbon Principles, expanding the accreditation of carbon credit projects and programs under these principles.

The ICVCM is governed by a diverse board comprising stakeholders from public, private, and non-profit sectors. It features an Executive Secretariat for day-to-day operations and Expert Panels that develop and oversee the application of standards like the Core Carbon Principles, ensuring rigorous, transparent governance.

What is the Voluntary Carbon Markets Initiative (VCMI)?

The Voluntary Carbon Market Integrity Initiative (VCMI) aims to ensure that claims made by businesses about their use of carbon credits are credible. Governed by a multi-stakeholder Steering Committee and supported by a Secretariat, the VCMI offers the “Claims Code of Practice,” a set of guidelines designed to help businesses make credible, transparent claims about their carbon market participation. This code ensures that corporate claims about carbon offsetting align with broader climate commitments and contribute authentically to global carbon neutrality targets.

The VCMI’s “Claims Code of Practice” includes a tiered framework guiding companies on making responsible carbon market claims. It outlines three tiers—Bronze, Silver, and Gold—each with increasing levels of ambition and rigor in carbon management and offsetting practices.

What is the International Emissions Trading Association (IETA)?

The International Emissions Trading Association (IETA) is a nonprofit business organization established in 1999. It advocates for the development of effective market-based trading systems for GHG emissions to address climate change cost-effectively. IETA’s role is to provide a platform for businesses to collaborate on market-based climate solutions, influence policy, and disseminate information on emissions trading. Its efforts aim to support the establishment and integration of carbon markets globally, enhancing environmental integrity and economic efficiency.

What is the Science Based Targets Initiative (SBTi)?

The Science Based Targets Initiative (SBTi) is a partnership between Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI), and the Worldwide Fund for Nature (WWF). It mobilizes private sector action on climate change by helping companies set science-based greenhouse gas emissions reduction targets. These targets align with what the latest climate science deems necessary to meet the goals of the Paris Agreement—keeping global warming below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Participants in the SBTi span a wide range of sectors and include major global companies like Apple, Walmart, and BMW. The initiative is governed by a team within the partnership organizations, with guidance from a Technical Advisory Group, ensuring that targets are robust, verifiable, and consistent with current scientific knowledge. Its aims are to drive ambitious corporate climate action which in turn significantly contributes to global emission reduction efforts.

SBTi has historically prevented participant companies from using carbon credits to offset emissions towards their emissions reductions targets, however a recent change in policy has opened the possibility of SBTi members to use offsets toward their Scope 3 emissions targets.[3]

[1] https://www.ecosystemmarketplace.com/publications/2023-em-all-in-on-climate-report/

[2] Project developers can also hold a public stakeholder meeting to collect and record comments about the project and complete a “do no harm assessment”.

[3] https://www.reuters.com/sustainability/sustainable-finance-reporting/comment-why-sbtis-proposal-include-carbon-credits-is-right-side-climate-history-2024-04-24/

What are the problems with traditional biomass cooking?

Over 1 gigaton of carbon dioxide (CO₂) is emitted each year by burning wood fuels for cooking [1]. That figure is approximately 2% of global emissions and comparable to the carbon footprint of the United Kingdom. The carbon footprint of traditional biomass cooking comprises emissions from the woodfuel supply chain, fuel combustion, deforestation, and forest degradation. Wood fuel harvesting and charcoal processing are primary drivers of regional forest degradation across the African continent [2]. Burning wood fuel also creates black carbon (BC) emissions, which are short-lived (8-10 days) but influence regional precipitation and temperature changes.

Household air pollution (HAP) from cooking causes over 4 million premature deaths each year from conditions including lung cancer, chronic obstructive pulmonary disease, and ischemic heart disease. HAP exposure is responsible for 45% of pneumonia deaths in under-fives and it is a leading cause of blindness and low birth weight globally. It is worth noting that there is broad scientific consensus that the breadth of negative health outcomes and the number of ill-health episodes caused by inefficient cooking have likely been underestimated due to insufficient data.

In developing countries, women usually take responsibility for cooking. Their health, and that of their children, is disproportionately impacted by HAP. Inefficient cookstoves require more fuel to be collected and more time in attendance while food is cooked. The aggregate time spent in fuelwood collection and cooking is around 5 hours per day. Injury and violence are commonly overlooked risks of frequently arduous trips to collect firewood.

Traditional biomass cooking is a problem for public health, gender inequality, our climate, and the local environment. In Sub-Saharan Africa (SSA), where TASC’s work is focussed, the total cost of traditional open-fire cooking is over $330 billion a year: $186 billion on gender, $96 billion on health, and $47 billion on climate and environment [3]. Replacing traditional biomass cookstoves will improve women’s health, allow them greater economic and social freedoms, and reduce CO₂ emissions.

What does TASC do?

TASC distributes ICS across SSA and monitors reductions in wood fuel use amongst recipient households. We register our projects with reputable international carbon standards to receive verified carbon credits.

Why do you distribute cookstoves?

We distribute ICS to address two acute needs: to reduce the environmental, social and economic impacts of open fire cooking; and to meet the demand for high-quality carbon credits to meet regulated or voluntary emissions reduction targets.

What is an improved cooking solution? Is it the same as a clean cookstove?

ICS include a range of interventions or appliances designed to improve fuel efficiency and emissions performance in cooking. Most are improved cooking stoves; however the category also includes products like thermal insulation sleeves.

According to the World Bank Group (WBG) and World Health Organisation (WHO), a clean cooking solution, or clean cookstove, is an advanced ICS that lowers particulate matter and carbon monoxide emissions to near zero [4]. Clean cookstoves do not burn wood or charcoal but instead use feedstocks like processed briquettes, biomass pellets, liquid petroleum gas (LPG), methanol, or even electricity. The name ‘clean cookstove’ is often used to describe all manner of ICS, which can be confusing.

Which cookstoves do you distribute?

TASC distributes portable rocket stoves supplied by Burn Manufacturing of Kenya and RocketWorks of South Africa. We purchase different models depending on which country we are operating in and whether the target communities are predominantly wood or charcoal fuel users.

How do rocket stoves work?

The central feature of a rocket stove is an ‘L-shaped’ chamber that is designed to moderate airflow into the fire and maximise fuel combustion. Rocket stoves are open at the point at which wood is fed in, allowing lots of oxygen to be drawn into the unit. As the fire starts, rising hot air moves up through the chamber, drawing more air behind it. The insulated combustion chamber only has space for a small amount of fuel to burn at any given time, ensuring almost complete combustion prior to the flames reaching the cooking surface.

Why do you distribute rocket stoves?

Improved cookstoves vary widely in terms of the fuel feedstock, construction materials, methods of production, and performance. Some carbon projects distribute ‘basic’ artisan cookstoves or make permanent alterations to ‘legacy’ coal or biomass cookstoves. ‘Basic’ and ‘legacy’ cookstoves achieve minor efficiency gains and negligible reductions in local air pollution. These products are not quality tested, prone to malfunction or degradation, and are relatively expensive considering their overall impact.

We distribute the specific models of rocket stoves because they:

• achieve the highest fuel efficiencies for biomass stoves (over 50% improvement on traditional stoves)
• achieve, on average, 60 percent HAP reduction [4], which is the highest combustion efficiency for biomass stoves
• are manufactured in special purpose factories to maximise durability and consistency
• are reported to last from 7-10 years
• are financially viable for use in carbon credit projects; and
• allow people to cook traditional meals using fuel that is readily available in their community.

Why don’t you distribute LPG or electric stoves?

LPG and electric stoves are difficult to distribute for two reasons:

• There isn’t suitable fuel supply in remote rural communities, and;
• The products are too expensive to distribute under current carbon credit methodologies.

However, we are monitoring methodological updates to determine when it would be feasible to implement LPG and Electric cooking projects. LPG and electric stoves can improve HAP reductions from 60% to over 90%.

What are the traditional cooking solutions that you are replacing?

Most families in our project areas use ‘3-stone’ fires, where pots are balanced on rocks, or ‘Os’, which are a circular metal pot stand. 3-stones are most common amongst rural, wood fuel users. In peri-urban and urban areas we find basic charcoal stoves called ‘Mbalula’, which resemble an old washing machine drum, or a metal bin with holes drilled through the sides.

Which areas does TASC work in?

We are currently active in South Africa, Zambia and Zimbabwe.

What is the level of need in these countries?

In Sub-Saharan Africa (SSA), approximately 729 million people, or 73% of the regional population, have no access to any ICS [1, 3].

• 88% of rural Zambian households have no access to electricity and just 2% have an electric cooker. In total, over 83% of households cook with biomass; 46% burn wood on 3-stone fires, and over 36% use Mbalula, mainly with charcoal [5].
• 95% of rural Zimbabwean households rely on firewood or charcoal for daily cooking. 66% of urban households are connected to the grid but unreliable supply forces many to employ charcoal stoves as the primary mode of cooking [6, 7]. ICS are beyond the reach of most household budgets, due to the upfront cost.
• South Africa has high rates of electrification and most of the population does not rely on biomass fuel. Nevertheless, disparate rural communities live a world apart from the urban centres and receive little to no social support from the national government. Thus, we have identified communities where SA citizens and economic migrants face the same issues as in Zambia and Zimbabwe.

All the areas in which we operate suffer from high annual increases in deforestation, combined with high proportions of woodfuel use. The link between woodfuel consumption and deforestation is highly localised and, charcoal supply in particular, is considered a primary cause of deforestation [8].

How does TASC distribute the cookstoves?

Distribution starts with sensitization, which is the dissemination of information about the proposed project to local communities. The objectives of pre distribution sensitization meetings are to maximize the adoption of the new stove and eliminate the use of traditional stoves. Sensitization meetings are arranged through local tribal authorities, which helps ensure the project is promoted in a culturally appropriate fashion. Attendees receive a presentation on the benefits of the efficient stove, how to cook with it, and how to obtain one. Afterward, the names and addresses of those who would like a stove are collected. Only one cookstove is allowed per household.

Several days later, our team will return to each village to distribute the stoves. They use a mobile application to collect data on the recipients, including full name, social security number, proof of identity, address, family size, GPS location etc. The recipients also sign an End User Agreement. The agreement confirms that they understand that TASC retains the rights to monitor the stove usage and the ownership of any carbon credits that may be obtained by doing so.

Why do you give the cookstoves away for free?

We give stoves away in exchange for the exclusive right to monitor them and sell carbon credits associated with their performance. We find this is the most efficient method of distribution. Demanding any cash payment – upfront, financed, or concessionary –dramatically reduces uptake because our target beneficiaries cannot afford it. Contrary to popular belief, we do not find beneficiaries to be less willing to look after stoves that they didn’t pay for. Our experience is supported by academic research [9].

How do you measure the performance of the cookstoves?

The primary measurement of cookstoves’ performance is reduction in fuel use and, consequently, the reduction in carbon dioxide equivalent (CO₂e) emissions. This is how the issuance of carbon credits is determined. CO₂e savings are calculated by following methodologies by the Gold Standard or the Verified Carbon Standard. The Gold Standard provides guidance on how other project impacts – health and gender – can be extrapolated from the data on stove usage.

Each year, the project scenario is compared with the baseline scenario to calculate the average fuel savings per unit (stove/household). Both scenarios are determined by a conducting a habit survey and a kitchen performance test (KPT) to understand how households cook before and after the introduction of new stove, and to calculate fuel usage.

The habit survey is used in both baseline and project scenario to determine household cooking habits, stove usage, and household demographics. The KPT is used to directly measure fuel consumption over a 24-hour period. The KPT is performed over 4 consecutive weekdays. Project field officers randomly select households from the database and visit them every 24 hours to weigh a stockpile of fuel and measure the change from day to day. The field officers instruct the participant households to consume fuel using all cooking technologies that they would normally use. If secondary biomass stoves are used, their emissions are included in the results.

All field testing and surveys measure real cooking habits and fuel use in a statistical sample of participant households, chosen using a randomised selection technique. The habit survey sample size is determined by using the “Sampling and surveys for CDM project activities and programmes of activities” document. Projects over 1000 devices are required to have a minimum sample size of 100 surveys but we oversample to 120 to account for possible anomalies and/or survey errors. For KPTs, the following guidelines apply. A statistically valid sample can be used to determine parameter values, as per the relevant requirements for sampling in the latest version of the CDM Standard for sampling and surveys for CDM project activities and programme of activities. 90% confidence interval and a 10% margin of error requirement shall be achieved for the sampled parameters unless mentioned otherwise in the methodology. In any case, for proportion parameter values, a minimum sample size of 30, or the whole group size if this is lower than 30, must always be applied.

As we are following the 90/10 approach with a covariance of 0.4, we are required to do a minimum of 45 samples. However, it is suggested to oversample to at least 60 tests to provide the ability to remove outliers and exclude any tests where experimental errors have occurred.

After sampling, fuel savings per device are calculated by comparing the project scenario against the baseline scenario. Fuel savings are multiplied by CO₂ and non-CO₂ emission factors as well as the fraction of non-renewable biomass (fNRB) and divided by 365 to calculate the total tonnes of CO₂e reduced per device per day. This value is multiplied by the total number of technology days – the sum of days all devices have been active in the monitoring period – resulting in the gross emission reductions (in tCO₂e) for the monitoring period.

TASC takes several steps to ensure project success, including:

• our own proprietary cloud-hosted database for collecting records of stove distribution, including contact information, GPS locations, archived stove purchase agreements, financial accounts and distribution records, all of which is used for spot checking and cross referencing by a third-party auditor.
• In-house monitoring (beyond verification or compliance monitoring) and community engagement is conducted throughout the project lifespan to identify where and when stoves may be underused and inform where additional training is required to maintain a high usage of stoves.

What is thermal efficiency? Why is it different to fuel reduction?

Thermal efficiency (TE) describes the fraction of heat energy that is put to work. In this case, it is the fraction of heat transferred to the cooking pot. The TE of our ICS is approximately 40%, while TE of an open fire is approximately 10%. That means 90% of the heat energy is lost in an open fire. We can estimate overall fuel savings by calculating the percentage difference between the old and new TE, as follows:

(1-(TE_old/TE_new))*100

(1-(10/40))*100 = 75%

The higher TE of the ICS means that ~75% less fuel is needed than cooking the same meal on an open fire. It should be noted that this fuel saving estimation is only done for ex-ante purposes and actual fuel savings in the implemented project is calculated by doing field consumption tests (i.e. KPTs) in the baseline and project scenarios.

References

[1] Bailis et al. 2015. The carbon footprint of traditional woodfuels. Nature Clim Change 5, 266–272 (2015). https://doi.org/10.1038/nclimate2491

[2] Hosonuma et al. 2012. An assessment of deforestation and forest degradation drivers in developing countries. Environ. Res. Lett. 7 044009. Available online: https://iopscience.iop.org/article/10.1088/1748-9326/7/4/044009

[3] Energy Sector Management Assistance Program (ESMAP). 2020. The State of Access to Modern Energy Cooking Services. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO. Available online: http://documents1.worldbank.org/curated/en/937141600195758792/pdf/The-State-of-Access-to-Modern-Energy-Cooking-Services.pdf

[4] Energy Sector Management Assistance Program (ESMAP). 2015. The State of The Global Clean and Improved Cooking Sector. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO. Available online: https://openknowledge.worldbank.org/bitstream/handle/10986/21878/96499.pdf?sequence=1

[5] Luzi et al. 2019. Zambia – Beyond Connections: Energy Access Diagnostic Report Based on the Multi-Tier Framework (English). Energy Sector Management Assistance Program (ESMAP) Washington, D.C. World Bank Group. Available online: http://documents.worldbank.org/curated/en/477041572269756712/Zambia-Beyond-Connections-Energy-Access-Diagnostic-Report-Based-on-the-Multi-Tier-Framework

[6] Johnstone, Kevin. 2020. Stoking Finance for Affordable Cookstoves: Experience from Malawi and Zimbabwe. International Institute for Environment and Development. Available online: https://pubs.iied.org/sites/default/files/pdfs/migrate/G04472.pdf

[7] Zimbabwe National Statistics Agency. 2017. Inter-censal demographic survey. Available online: http://www.zimstat.co.zw/wp-content/uploads/publications/Population/population/ICDS_2017.pdf

[8] van Dijk et al. 2019. Assessing the land-energy nexus in Southern Africa: An integrated assessment and scenario approach. In: EGU General Assembly 2019, 7-9 April 2019, Vienna, Austria. Available online: http://pure.iiasa.ac.at/id/eprint/16860/1/20190409.PalazzoVanDijkEGU.pdf

[9] Bensch, Gunther; Peters, Jörg (2012) : A Recipe for Success? Randomized Free Distribution of Improved Cooking Stoves in Senegal, Ruhr Economic Papers, No. 325, ISBN 978-3-86788-374-0, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Essen,

http://dx.doi.org/10.4419/86788374

What are the risks associated with an unsafe water supply?

Contaminated water and poor sanitation are linked to transmission of diseases such as cholera, diarrhoea, dysentery, hepatitis A, typhoid and polio. Absent, inadequate, or inappropriately managed water and sanitation services expose individuals to preventable health risks. Inadequate management of urban, industrial and agricultural wastewater means the drinking-water of hundreds of millions of people is dangerously contaminated or chemically polluted. Natural presence of chemicals, particularly in groundwater, can also be of health significance, including arsenic and fluoride, while other chemicals, such as lead, may be elevated in drinking-water because of leaching from water supply components in contact with drinking-water.

Globally, about 1 million people are estimated to die each year from diarrhoea because of unsafe drinking-water, sanitation and hand hygiene. Yet diarrhoea is largely preventable, and the deaths of 397 000 children aged under 5 years could be avoided each year if these risk factors were addressed. Where water is not readily available, people may decide handwashing is not a priority, thereby adding to the likelihood of diarrhoea and other diseases.

Diarrhoea is the most widely known disease linked to contaminated food and water but there are other hazards. In 2021, over 251 million people worldwide required preventative treatment for schistosomiasis – an acute and chronic disease caused by parasitic worms contracted through exposure to infested water.

In many parts of the world, insects that live or breed in water carry and transmit diseases such as dengue fever. Some of these insects, known as vectors, breed in clean, rather than dirty water, and household drinking water containers can serve as breeding grounds. Simple interventions such as covering water storage containers or daily filtration can reduce vector breeding and may also reduce faecal contamination of water at the household level.

Why does TASC distribute ceramic water filters?

We distribute ceramic water filters to address two acute needs: to reduce the risks associated with unsafe water use; and, to meet the demand for high-quality carbon credits to meet regulated or voluntary emissions reduction targets.

Which water filters do you distribute? How do they work?

TASC financed the distribution of SPOUTS Purifaaya ceramic water filters in Uganda. SPOUTS have been manufacturing and distributing water filters, in Africa, since 2012. The ceramic water filter sits in a 20-litre plastic container which is perfect for households of up to 8 people. It provides up to 5 years of safe drinking water with replacement filters available.

How are these filters certified as fit for purpose?

Purifaaya water filters have been used in 5 registered Gold Standard VPAs (Verified Project Activity) for clean water dating back to 2017. In addition, SPOUTS has a 1-star rating water filter rating from the World Health Organisation (which is the level given to filters that filter Bacterial water borne diseases), SPOUTS has certification from the relevant water authorities in Rwanda, Tanzania, Uganda and Nigeria. Furthermore, the Purifaaya filters have undergone and passed testing in Uganda for bottled water grade water purity.

How long do these filters last?

These filters are replaced after a 4-year period. The easy-to-use filter system requires cleaning once every 2-3 weeks and basic care instructions are provided.

Where were these filters distributed?

TASC funded filters were distributed in the Western region of Uganda in the Toro Kingdom, specifically in the Kamwenge and Kyenjojo districts.

How does the distribution process work for TASC projects?

Distribution starts with sensitization, which is the dissemination of information about the proposed project to local communities. The objectives of sensitization are to maximize the adoption of the new ceramic filters. Sensitization meetings are arranged through the local kingdom authority and village leaders, which helps ensure the project is promoted in a culturally appropriate fashion. Attendees receive a presentation on the risks of unsafe drinking water, the benefits of using ceramic filters and how to effectively use and clean the filters. At this point, the names and addresses of those who would like a filter are collected.

After the presentation and training, the filters are distributed. A mobile application is used to collect data on the recipients, including full name, social security number, proof of identity, address, family size, GPS location etc. The recipients also sign an End User Agreement which confirms that they understand that the project developer retains the rights to monitor the filter usage and the ownership of any carbon credits that may be obtained by doing so.

What is the level of need in Uganda?

According to the United Nations and World Health Organisation’s Joint Monitoring Programme, 19 percent of the Ugandan population relies on unimproved or surface water for their daily household needs. In a population of 45 million this means that 8 million people are drinking from streams, ponds, unprotected hand dug wells and other unsafe water sources. In addition, a further 32 percent has limited access where the water source is likely to be safe but it takes the average person 30 minutes or more to retrieve it because of travelling distance, queueing or both.

This means that over 21 million people in Uganda are living without basic access to clean drinking water. The vast majority of people rely on water boiling to purify their water and prevent water borne diseases like diarrhoea, typhoid and cholera.

Further afield and according to UNICEF, Eastern and Southern Africa (ESA) ranks lowest in access to at least basic drinking water services. Over 226 million people in ESA (47 per cent) have no access to at least basic drinking water services. The highest burden is in countries like Ethiopia (61 million), Uganda (27 million) and Tanzania (24 million). Water supply in institutions (schools and heath care facilities) is not any better. Over 78 million (42 per cent) school-age children have no access to drinking water services in schools.

Why are the filters given away for free?

The ceramic filters are given away for free in exchange for the exclusive right to monitor their usage and sell carbon credits associated with their performance. We find this is the most efficient method of distribution. Demanding any cash payment – upfront, financed, or concessionary –dramatically reduces uptake because our target beneficiaries cannot afford it. As these filters directly reduces their risk of illness, we do not find beneficiaries to be less willing to look after filters that they didn’t pay for.

How are emissions reductions calculated from the use of water filters?

According to restrictions outlined in the Gold Standard methodology used for this project, a household is limited to a total daily water use of 5.5 litres per person. However, field consumption tests are completed to determine the volume of water per capita that is used from the filter. This figure is used in conjunction with data on the energy requirements for boiling water, thermal efficiency of traditional fires, and the net calorific value of wood fuel in order to estimate the daily wood use per household and the GHG emissions thereof if they were to boil the water in order to make it potable.

This conservative daily wood use estimation, and its associated emissions from combustion are set as the baseline scenario before the distribution and use of ceramic water filters. As a result of the use of these filters, emission reductions can be calculated from the prevention of the use of wood fuel for boiling and purifying household water.

How does TASC avoid the risk of overcrediting?

The first step to successful monitoring, reporting and verifying (MRV) project CO₂e emissions reductions is a complete record of filter distribution. All records must be accessible for spot checking and cross referencing by a third-party auditor. Contact information or GPS locations allows a project auditor to easily contact and visit end users. An auditor must also be able to cross reference pertinent project documentation, including archived filter purchase agreements, financial accounts and distribution records. A custom-built, cloud-hosted database for all data collection and monitoring ensures thorough and real time traceability of each filter.

The second step is the analysis of usage after distribution of the new ceramic filters, and confirmation that wood fuel is not being used for purifying water through boiling. The project scenario relies upon monitoring and usage surveys. The former investigates changes in how much filters are used, how much water they are used for, and seasonal variations in either. The results of a monitoring survey can lead to increases or decreases in the volume of carbon credits that can be issued for each project filter.

Ongoing monitoring visits to households take place at least once a year, with telephone calls being made twice a year to confirm usage and maintenance over the project lifetime.

References

WHO fact sheet – Drinking Water. March 2022. https://www.who.int/news-room/fact-sheets/detail/drinking-water

UNICEF -Water and Environment. https://www.unicef.org/esa/water-and-environment

Overview

TASC’s Grassland Restoration and Stewardship in South Africa (GRASS) project seeks to catalyse the regeneration of South Africa’s grasslands and savannahs through adaptive livestock and land management.

Through this initiative livestock farmers are supported in the development of an annual, adaptive grazing plan tailored to their individual farm and are provided with access to ongoing training, mentorship and a community of practice.

While the GRASS Project is primarily aimed at creating healthy landscapes through the sequestration of carbon in the soil, farming enterprises will also benefit from increased productivity and market certification. In addition, the proper application of holistic land management practices will result in the generation of a carbon revenue stream for farmers through carbon credit mechanisms.

This document serves to provide succinct answers to the most commonly asked questions regarding the operational, technical, financial and legal aspects of the GRASS Project.

Private Farming Project Manager:

William Moolman
+27 (0) 81 830 3127
[email protected]

For any technical, financial, carbon or other queries, please send an email to:
[email protected]

The official Project Documents, VVB audit reports, and Verra project review documents can be accessed on the Verra Registry at the following link:

https://registry.verra.org/app/projectDetail/VCS/2931

Operational

1. What other entities and partners are involved in the process?

At TASC, we believe in strong partnerships and working with entities that are actively involved in the field. We have partnered with several Implementation Partners (IPs) for this Project. Organizations are selected based on their extensive experience working in community development, agriculture, conservation, or restoration programmes. When partnering with an organization, we assess the following:

• Goal alignment: Is the organisation aligned with the mission and goal of restoring rangelands and community development?
• Reach: Does the organization have a significant presence in the landscape which presents an opportunity to achieve greater impact through partnership?
• Trust: Has the organization been active in the landscape for more than 3 years; does it have good relationships with stakeholders and the trust of the community?
• Willingness to Partner: Does the organization wish to create an alliance with the GRASS project?

There is a full description of proposed implementation partners in the Project documentation linked above.

OVK was one of the first companies to show interest in partnering with TASC on their GRASS project. This was mainly driven by international legislation applicable to both the wool and mohair markets which requires producers (farmers) to ensure that their products are farmed in accordance with practices that are aligned with positive environmental outcomes. As a farmer orientated stakeholder, OVK recognised the need for assistance in converting to these practices and therefore has sought to facilitate education and awareness around nature positive farming methods. OVK believes that TASC’s Grass project has the potential to benefit farmers and was keen to become involved as part of their policy of social responsibility towards the local farming community and other related stakeholders further along the supply chain.

Partnering with other organisations is not an attempt to facilitate or encourage client base transfers. Hub Leaders from any partner organization, including OVK, are deemed to be TASC GRASS project representatives when fulfilling their project duties. TASC is also in discussion with other similar organisations towards partnership.

2. Are the Hub Leaders appropriately qualified?

All our Hub Leaders are trained in Regenerative Land Management and Ecological Outcomes Verification and function under the mentorship of trusted regenerative farmers with decades of experience. Hub Leaders also receive ongoing training in the administrative requirements of the carbon reporting process.

3. How is the administration of (multiple) herds managed?

The Land Management Plan is the cornerstone of all project activities. It takes initial effort but is only required once a year (if sufficient planning is done in advance) and is extremely effective in the longer term.

The Healing Hooves land management course suggests keeping a separate plan for each herd by making a copy of the “open season” and “closed season” sheet for each herd. Hub Leaders are able to guide farmers through setting up the plan for multiple herds.

Various mobile apps are being considered to avoid unnecessary administration by enabling quick and user-friendly logging of animal movements. The App will not replace the annual, once off Planning phase, but is intended to ease the administrative burden of recording the actual activity on the farm. A data platform has been built that will use the data from the App to populate the Plan with the required “actuals” information.

4. How is the Project team structured?

The company structure is available here: https://tasc.je/our-people/ .

Technical

1. Why are soil carbon improvements measured?

The GRASS project is a greenhouse gas emission reduction and removal project. The carbon market is legislated in such a way that the principle of Additionality applies to all such projects. In terms of this principle, it must be proved that the emissions reductions and removals would not have occurred in the absence of funding through the carbon credit mechanism. Thus, only carbon that is sequestered “in addition” can be sold.

The project activity, which includes introducing planned adaptive grazing management and improved fire management on farms, contributes to improvements in the soil organic carbon stocks. These improvements are reported in metric tonnes of CO₂ equivalents per hectare (tCO2e/ha). To clarify further, 1 carbon credit is the equivalent of 1 tCO2e.

2. How are soil carbon improvements measured?

The soil carbon sequestration is modelled using a peer-reviewed and Verra-approved biogeochemical process-based model. This means that the long-term effects of management on the soil carbon are modelled and divided into annual increments to allow for annual credit issuances. The model is calibrated to local conditions and the baseline soil organic carbon content. Every 5 years or less, the soil organic carbon is tested again to “true-up” the model. More details on this process are presented in the Project Documents linked above.

Soil samples are taken at a depth of 30 cm (where the soil depth allows) in accordance with the VM0042 requirements. The soil sampling and analyses protocols followed are described in detail in the Project Description document available on the Verra Registry.

3. When are soil carbon improvements measured?

There is a seasonal cycle to soil carbon sequestration. The carbon sequestration is most active in the growing season. In the dormant season, the main carbon emission reduction will be related to fire management. Weather events such as frost will slow down plant growth and activity and therefore their ability to sequester carbon into the soil. The Brown Date in the Land Management Plan indicates when the soil temperature drops below the threshold for further grass growth (however, cool season grasses will continue growing). The carbon sequestration metrics are modelled on a long-term basis and factor in seasonal variations, therefore weather events such as frost will not affect baseline soil carbon stock measurements.

4. What is Ecological Outcomes Verification (EOV)?

The Ecological Outcomes Verification is additional to the measurements used for the carbon calculations and serves as a management and ecological health tracking tool. If, for example, severe frosts have made grass specie identification more challenging, the EOV assessment will factor in recent weather patterns.

The EOV assessment comprises:

• Annual short-term assessments; and
• Long-term assessment every 5-years

These assessments are carried out in the growing season and will typically be scheduled to take place at the same time of year for consistency.

Financial

1. How do Carbon Markets work?

There are two main carbon markets: i) the Voluntary Market, and ii) the Compliance Market.

i) Under the Voluntary Market, Carbon Credits are typically sold on an Emission Reduction Purchase Agreement (ERPA) basis where the price is influenced by:

• supply and demand
• credit type (removals, reductions, or a combination)
• negotiated contract terms
• the quality of the credit
• any additional project benefits (for example, biodiversity and community benefits).

The 2024 voluntary market price for soil carbon credits ranges between $8 and $25 per credit.

ii) In the South African Compliance Market, large industries are taxed based on their emission These companies can offset a percentage of their tax by buying carbon credits generated in South Africa. The SA carbon tax rate is gazetted and increases over time and the carbon credits are therefore sold at a discount of between 15% and 25% to the prevailing   tax rate. The tax rate in a year is the price used to calculate the carbon credit sales price when credits are sold in June of the following year:

To read more about the SA Carbon Tax Act:

https://www.gov.za/documents/acts/carbon-tax-act-15-2019-english-afrikaans-23-may-2019

2. What is entailed in the sale of Carbon Credits?

TASC always models anticipated revenue based on the worst-case scenario. To this end, we view a sale in the compliance market as the floor price. We have a number of existing buyers in South Africa, however, in the interest of all stakeholders, we always aim for the highest price we can get and are working to sell at a higher price in the voluntary market, if possible.

As part of the Stakeholder Engagement plan, annual revenue share meetings will be held (typically scheduled for July) during which TASC will report back to participating farmers on the sale of the credits, the current market position, and the results of the previous monitoring period. Each farmer will also receive a personalised P&L statement highlighting the number of credits and revenue allocated, the deductions (e.g. subscription fee) and farmer net revenue share.

An overview of what to expect in the carbon lifecycle is shown in Appendix 1. Please note that the first Monitoring, Reporting and Verification cycle will look slightly different to the long-term annual schedule.

3. What financial assistance is available to farmers?

Capital constraints are a known financial barrier to the adoption of regenerative livestock management. To overcome that barrier, financial assistance is available to invest in on-farm improvements and infrastructure (for example, mobile fencing units, waterpoint infrastructure, etc.)

Clause 8 of the Carbon Agreement (Capital Payments) states that:

“The parties acknowledge that the Regenerative Land Management Plan may require capital expenditure. At any time, the Owner may request TASC to make a capital payment to the Owner in consideration for an adjustment to the Relevant Percentage. TASC agrees to consider any such request in good faith. If the Parties agree, then TASC shall make the capital payment requested and the Parties shall note in an addendum to this Agreement the corresponding agreed adjustment to the Relevant Percentage.”

The value of the available capital will be specific to each farmer and will be determined based on the timeframe needed to recover the capital from the carbon credits generated on the farm. TASC’s intention is to recover the Capital Payment Amount along with their risk adjusted cost of capital[1] via an adjustment to the farmer’s revenue percentage, the intention being that the capital payments are repaid before revenues are distributed.

TASC principles regarding capital assistance:

• TASC will assess each request for financial assistance on a case-by-case basis and has no obligation to provide the capital assistance.
• The capital provided must be used to assist the farmer in implementing his/her Regenerative Land Management Plan and not for any other purpose.

To access the financial assistance, the following will be required:

• The farmer should submit his/her proposed Regenerative Land Management Plan, including:
• a statement commensurate with: “The following assistance is required to implement my Regenerative Land Management Plan”;
• An indication of the infrastructure requirements[2] for which the capital is needed; and
• At least 2 quotes per requirement line item.
• The relevant Hub Leader and/or a more senior Regenerative Mentor (for example, Healing Hooves) must approve both the proposed Regenerative Land Management Plan and the need for assistance with capital requirements.
• All documents should be provided to the Hub Leader.

Should any more information be required, TASC’s Finance Team can be contacted via the email link [email protected]

4. Will farmers be held accountable for the repayment of the Annual Subscription Fee or capital assistance at any stage?

No, Clause 7.6 of the Carbon Agreement provides as follows:

“If NP [Net Proceeds] is a negative sum, the negative balance shall be brought forward to be deducted from the next Third-Party proceeds and so on until discharged. Any negative balance still outstanding 18 months after the Termination Date shall be written off and reduced to zero.”

In other words, if the proceeds from the sale of credits are insufficient to cover the Subscription Fee over the duration of the Agreement, any negative balance still outstanding 18 months after termination of the Agreement will be written off.

Additionally, Clause 13.2 of the Carbon Agreement provides that the Parties have no claim against each other following termination of the contract if either party defaults on their material obligations. This includes any debt incurred by a farmer in respect of Subscription Fees or in respect of capital assistance.

As the funding for GRASS P12 has been provided on a limited recourse basis, TASC mitigates the risk of investing in a Project that is heavily reliant on human behaviour change by ensuring that their partners in the GRASS programme are fully committed to the adoption of regenerative farming principles and to full participation in the Project. This is why the due diligence and farm eligibility procedures conducted by TASC are extremely rigorous.

5. When can farmers expect to start receiving carbon revenue?

Remuneration starts once credits have been issued and sold. It should be noted that the soil carbon improvements (and therefore the credits issued, and carbon revenue generated) are directly related to actual management activities implemented on the farm and the evidence thereof as logged on the Land Management Plan.

6. How much carbon revenue can farmers expect to receive and how is it calculated?

Clause 7 of the Carbon Agreement sets out the arrangements between the Parties with regard to the calculation of the Annual Subscription Fee, Third Party Sale Proceeds and the Owner’s Revenue Share.

Specifically, Clause 7.1 describes how the Annual Subscription Fee (which is based on the costs of the project) is calculated by multiplying the number of hectares of eligible land on a farm by ZAR33.81. As the Fee is reviewed every ten years, this formula will apply until the end of 2033, subject any other possible adjustments provided for in Clause 7.

Clause 7.3 then provides that, following a sale of credits, TASC will provide farm owners with a statement setting out the proceeds of the sale, the Annual Subscription Fee payable and the net proceeds of the sale. The farmer owners’ revenue share (which starts at 60%) is calculated on the net proceeds reflected in the statement.

At the annual revenue share and planning meeting, each farmer will also receive a personalised Profit & Loss statement which will include the     revenue share percentages as detailed in the Carbon Agreement.

It should be noted that the carbon generated on any given farm is directly linked to the farm’s management history, the level of adoption of regenerative principles and management, the climate, the soil type and the size of the eligible area.

Farm eligibility assessments include:

• Mapping the eligible land cover classes according to the VM0042 Methodology requirements.
• Deriving the long-term climate data.
• Providing detailed evidence of the land management history.

Accordingly, the number of carbon credits and revenue generated will be based on the farm’s baseline scenario and the efficacy of implementation of actual project activities. TASC will provide an estimate of potential carbon revenue as part of the implementation and support process.

Legal/Contractual

1. Why is the duration of the Carbon Agreement 30 years?

One of the core carbon principles is permanence. Soil carbon projects must provide evidence that the sequestered carbon is stored permanently (which is practically defined as 100 years or more). Ensuring that the regenerative land and grazing stewardship continues sustainably over the long-term is one of the ways TASC, as a project developer, can mitigate reversal risk i.e. when the soil carbon is lost or emitted into the atmosphere. It also increases the integrity of each carbon credit being sold as each ton of CO2e represents an actual ton of carbon stored in the soil. Decreasing the contract period increases the non-permanence risk of the project.

2. Why are financial statements required as part of the Due Diligence process?

TASC’s corporate governance policies require adherence to the highest ethical standards. This includes conducting thorough due diligence on any third party with whom we contract. These due diligence procedures are part of TASC’s Risk Management Framework which requires compliance with international standards regarding Anti-Money Laundering and Countering Financial Terrorism.

3. In what ways can the Carbon Agreement be terminated?

Clause 12 of the Carbon Agreement provides that:

This Agreement may be terminated in the following circumstances:

12.1.1 by mutual agreement of the Parties;

12.1.2 as provided in clause 2.4; [where the necessary third party consents have not been obtained within 3 months of signature]

12.1.3 as provided in clause 5.7 [where the land has been compulsorily acquired by an authority] or 5.8 [if the land is sold or otherwise disposed of by the owner];

12.1.4 as provided in clause 13.2 [where there is default on the part of either party ie. a Party has not complied with any of the material obligations in the Agreement; or

12.1.5 by notice in writing from TASC to the Owner where TASC, acting reasonably, determines that due to a change in market conditions (including a collapse in the demand for Project VCUs), the Project is no longer commercially viable. Note: TASC is best placed to determine this and it is based on market conditions in both the voluntary and compliance market. For this clause to be effected, both markets would have to cease to operate with no options to sell the credits.

12.2 The provisions of clause 7 [payments] will continue to apply after the Termination Date in relation to any Issuance which is in respect of the period up to the Termination Date. In addition, clause 1 [Terms] , clause 5.4 [access for VVB auditing], clause 10 [Confidentiality], this clause 12.2 and clauses 15 to 26 [Indemnity, Amendments, Assignment, Entire Agreement, No Indulgence, Exclusion of Consequential Loss, Notices, Counterparts, Governing Law, Health & Safety, Anti-Corruption, Third Party Rights]shall continue to apply after the Termination Date.

[1] The risk adjusted cost of capital is required because of the limited recourse nature of this funding.

[2] In addition to the Plan, the farmer presents their chosen supplier’s quote. TASC will make direct payments to the supplier upon approval. Cost of items are to be provided including Suppliers, Cost per unit, Quantity and Total Amount. Include the timing of the required amount, within a month, or within the next 3 months etc.

Appendix 1: What to expect from the Carbon Credit Lifecycle

1. For the first carbon issuance:

 

 

The cycle will be repeated for every issuance afterwards.