The Nature Climate Standard (NCS) operates a registry in which emissions avoidance, reduction and carbon removals (collectively mitigation outcomes) are registered as Carbon Credits. These mitigation outcomes are generated from forest projects that meet the requirements of the NCS. The NCS, which is described in detail in this document, lists the requirements that ensure that the climate impact of these projects is measurable. In summary, the carbon credits must be additional, long-lasting and calculated according to the latest scientific evidence. NCS is built on top of ISO 14064-2:2019 and adds further requirements to this norm.

The consultation process is as follows:

1. Expert consultation

In the expert consultation, independent experts are invited to evaluate the methodology.

1. Public consultation

The public consultation is announced on the website and forwarded to relevant stakeholders such as non-governmental organisations (NGOs) and technical experts with deep subject matter expertise. The consultation period is at least 30 days. All comments from stakeholders are acknowledged and responded to internally. The results of the consultation are published on the NCS website. All comments and responses will be made available anonymously on request.

Around 5-10 scientific experts should typically be involved throughout the public consultation process.

This Standard was first published on December 16 2024.

This document will be updated on an ongoing basis to reflect changes in the operation, governance and/or rules that apply to either Projects on, or activity described by, the Registry.

Any proposed material changes to the Standard will be put forward for review by independent experts. Following any amendments resulting from that process, the draft changes will be put out for public comment. After having incorporated any further amendments, the final changes will be published in an updated version of the Standard, alongside a clear explanation of the stakeholder input received and how this informed the final changes that were made.

Version numbers are updated according to standard Semantic Versioning practice, where three positive integers A.B.C denote the version of the Standard.

• Major (Integer A) - Updated when the Standard has undergone a significant change that may have impacts on Project eligibility, Verification practices or Credit issuance

• Minor (Integer B) - Updated when non-critical information has been added to, or removed from, the Standard – for example optional guidance

• Patch (Integer C) - Updated when non-material changes have been made – for example phrasing or reference changes

A full change-log, along with all previously published versions and their dates of publication, is publicly available on the NCS website.

In line with sections 6.11, 6.12, and 6.13 of ISO 14064-2:2019, project proponents must provide documentation that demonstrates compliance with the requirements of ISO 14064-3:2019. This includes project-specific documentation such as:

• A reversal risk mitigation plan

• A social and environmental risk assessment

Key Documentation Requirements

1. Project Design Document (PDD):

   1. The PDD must outline all project characteristics.

   2. It serves as the foundation for project validation against the applicable methodology.

   3. The document must include all information specified in section 6.2 of ISO 14064-2:2019.

2. Monitoring Reports:

   1. All projects must submit monitoring reports as per section 6.13 of ISO 14064-2:2019.

Handling of Sensitive Business Information

• The NCS will not publish sensitive business information contained in the PDD unless it is strictly necessary to verify GHG calculations.

• If sensitive information must be disclosed, project proponents will be notified in advance.

1.1.1 Project Types

The NCS applies to projects in the Land Use, Land Use Change and Forestry (LULUCF) sector that use methodologies accepted by the NCS and that are validated against such a methodology.

1.1.2 Geographical Scope

The NCS is focused on, but not restricted to, projects in Europe. It may also apply to other temperate zones. The language of the standard is English. Other languages may also be recognised if a trustworthy translation is available.

The Nature Climate Standard provides a comprehensive framework for the measurement, reporting, and verification of carbon storage and biodiversity outcomes through nature-based solutions. Rooted in the principles of ISO 14064-2, it ensures that projects adhere to high standards of environmental integrity, transparency, and governance, while remaining adaptable to incorporate diverse methodological approaches and evolving scientific and regulatory advancements.

Projects must be validated before they can begin to claim mitigation outcomes. Once these are verified, they may be issued credits.

3.4.1. Project Validation and Claimed Mitigation Outcomes

After a project undergoes an initial validation, it can start submitting claimed mitigation outcomes to NCS. However, these mitigation outcomes are not yet verified or issued as credits.

3.4.2 Verification and Issuance of Credits

Claimed mitigation outcomes must be verified by a third party before they can be used to issue credits. Once verified, these mitigation outcomes are eligible to become credits that can be sold or traded.

3.4.3 Crediting Period Start Date

This date marks the official start of the project activities. The project proponent can request a start date, but it cannot be more than two years before the initial project submission to the registry. Any carbon mitigation activities conducted on or after this date are eligible to be submitted as claimed mitigation outcomes, assuming they are later verified.

3.4.4 Crediting Period Duration and Renewal

The duration of the crediting period is specified in the project's project design document (PDD). Requirements for the minimum and maximum duration of a crediting period are defined in the relevant certified methodology. To renew a crediting period, the project proponent must update the PDD and re-validate the project to ensure ongoing compliance. The number of possible renewals is specified in the applicable methodology.

3.4.5 Verification Update Requirement

Projects must go through verification at the cadence specified in the relevant methodology. If the window for verification passes without verification, the project needs an updated PDD and must be re-validated before it can issue any further credits.

3.4.6 No Ex-ante Credits

NCS does not issue ex-ante credits.

Projects must assert with the PDD the method(s) for compliance with regulations for all jurisdictions to which the project is beholden.

If a project proponent decides to cancel their project, after it has already generated verified

NCS is built around the 14064 series of ISO norms. For methodologies, this means that they must comply with the requirements set out by ISO 14064-2:2019, hereafter referred to simply as "ISO" or "the norm". It is important to note that requirements set out by the norm often have additional guidance on their implementation included in the annex of the document.

In addition to the ISO norm, there are NCS-specific requirements that must also be fulfilled by all methodologies.

In this section, ISO requirements will be mentioned or listed in a general sense to not infringe upon copyright laws. It is indispensable that parties seeking to develop their methodology in accordance with NCS requirements have access to the full and up-to-date norm, available below.

2.5.1 Principles

All methodologies must apply the principles set out by ISO section 4. This is to ensure a true and fair account of GHG-related information and thereby ensure integrity of carbon credits and associated claims.

• Relevance of selected sources, sinks and reservoirs (SSRs)

• Completeness of GHG impacts and data

• Consistency to enable comparability

• Accuracy to a practical degree

• Transparency to ensure integrity

• Conservativeness to avoid over-estimation of mitigation outcomes

2.5.2 General Requirements

All methodologies must adhere to the general requirements listed in ISO section 6.1. Methodolgies must select and apply established criteria and procedures from a recognised origin and apply good practice guidance, where available.

Good practice guidance can come from a recognised origin, such as industry practices and associations, similar projects, expert judgement or others that are fit for purpose.

2.5.3 Project Boundaries

All methodologies must clearly define the project boundaries by identifying the GHG sources, sinks and reservoirs (SSRs) relevant to the project, as set out in section 6.3 of the ISO norm.

2.5.4 Baselines

All projects must be compared with a baseline scenario, in which the project activities would not have taken place. All methodologies must comply with Section 6.4 of the ISO norm, which states that the project proponent shall establish, describe, and apply criteria and procedures for determining a conservative baseline scenario, taking into account the most likely future conditions in the absence of the project, including legislative, technical, economic, and socio-cultural factors. The baseline scenario should reflect conditions such as current practice, technology, and policy, to ensure that the GHG emission reductions are additional to what would have occurred without the project.

The counterfactual of a project is the quantification of GHG emissions and storage that would have occurred without the project, assuming the baseline. The SSRs relevant to the baseline must be identified according to Section 6.5 of the norm. The baseline must take into account relevant data availability, reliability, and limitations to ensure the conservativeness of the estimate. Reference scenarios must reflect existing legislation and common practice. Only the climate impact that exceeds the reference scenario may be credited in the form of carbon credits.

The identified relevant SSRs pursuant to section 6.5 of the norm must be selected for monitoring or estimation, with any omissions requiring justification as stated in ISO section 6.6.

The baseline must be recalculated at the latest when the crediting period is renewed and revalidated in the course of project validation. Alternatively, if any changes are made to the project activities that impact the baseline scenario, or if the underlying assumptions of the baseline scenario change, the project proponent must review and revalidate the baseline to ensure it remains consistent with the validated project plan.

2.5.5 Additionality

This section outlines the additionality requirements that must be demonstrated to verify that mitigation outcomes claimed by projects are genuinely beyond what would occur absent of the project. All methodologies must outline a clear path to demonstrating additionality through one of two approaches: project-based additionality or standardised additionality methodologies.

2.5.5.1 Additionality at the Project Level

In this approach, additionality is determined through a set of detailed project-specific analyses, focusing on financial, regulatory, and environmental factors.

• Financial Additionality

  • Projects should show that they are financially dependent on carbon revenue for viability. Financial metrics, such as the Internal Rate of Return (IRR) or cost-benefit analyses, must demonstrate that without carbon financing, the project would be economically unfeasible.

  • For new projects, financial additionality is confirmed if the IRR without carbon revenue is below the required rate of return or shows negative profitability. Scenario analysis (e.g., market fluctuations, investment cost variations) is recommended to strengthen financial additionality demonstrations.

• Regulatory Additionality

  • Projects must operate above and beyond legal requirements, ensuring that they are not simply fulfilling statutory obligations. If legally mandated actions exist, only emissions reductions beyond those minimum requirements are considered additional.

  • The project should document relevant regulations and provide evidence that it voluntarily exceeds these regulatory standards.

• Environmental Additionality

  • The project should demonstrate a net-positive impact on the climate, confirmed by calculating net CO₂ removals after accounting for baseline emissions, leakage, and any project-related emissions.

  • This requires a thorough baseline scenario assessment, ensuring that the claimed reductions or removals represent genuine, incremental climate benefits.

2.5.5.2 Standardised Additionality at the Methodology Level

The standardised additionality approach uses pre-defined criteria to consistently evaluate additionality across similar projects within a particular sector or geographic area.

• Baseline Scenario Additionality

  • The project must show reductions or removals that exceed a standardised baseline scenario, representing what would typically occur without the project. This scenario should reflect average emissions or removals within the industry or region.

• Technology and Market Penetration Additionality

  • Projects are assessed against common practice within the region to verify that the activity is not widely adopted, ensuring it introduces a novel or less-common approach. For instance, the methodology can set thresholds (e.g., less than 5% adoption in the market) to indicate low technology penetration.

  • This requirement can alternatively confirm that the project uses innovative technology or practices with limited regional presence, distinguishing it from standard industry practices.

• Financial Additionality

  • Standardised methods include financial viability tests, determining if carbon credits are the primary or only revenue source for the project. Projects should provide evidence, such as return-on-investment or funding dependency analyses, to confirm this dependency on carbon financing for sustainability.

  • Projects facing significant initial costs or lacking alternative funding are particularly suited for this standardised financial test.

• Regulatory Additionality

  • Projects are required to demonstrate that their activities are not mandated by any local, regional, or national law or policy. If regulatory standards exist, the project must demonstrate that activities exceed the minimum legal requirements.

2.5.6 Quantification

All projects must robustly quantify their mitigation outcomes. This is done by calculating the emissions and removals separately for

1. each SSR relevant for the project;

2. each SSR relevant for the baseline scenario;

The mitigation outcomes are calculated as the difference between the project SSRs and the baseline SSRs, as specified in ISO 6.8.

2.5.7 Uncertainty of Mitigation Outcomes

Uncertainty is inherent to projects in the LULUCF sector due to the scale and dynamic nature of living ecosystems. NCS requires project proponents to mitigate that uncertainty by applying the following ISO requirements:

• ensuring appropriateness and quality of data, as outlined throughout ISO 14064-2;

• managing data quality as outlined in ISO section 6.9.

Additionally, methodologies must list all parameters used in the calculation of climate impact. The project proponent must address uncertainties associated with key variables and assumptions in a manner that is appropriate and ensures the conservativeness of the estimated GHG reductions or removals.

These requirements also apply to the use of model values. Methodologies can allow for the selection of model values that are applicable to project-specific conditions.

2.5.8 Durability and Monitoring

Durability, also known as permanence, refers to the period of time during which a mitigation outcome is considered valid. Beyond that period, the CO2 is considered to be re-released into the atmosphere. Projects must demonstrate a durability of at least 40 years.

As specified in ISO Section 6.10, a monitoring plan must be established and maintained for the project, ensuring that GHG emissions reductions and removals are tracked over the entire project lifetime. The monitoring plan must include controls and procedures to track key GHG data, including the periodic measurement of GHG reductions or removals. Monitoring must occur at least on a yearly basis, unless otherwise specified and justified in the methodology.

2.5.8.1 Monitoring

All mechanisms that lead to reversals must be identified. For example, in forests this includes intentional reversals, such as increased logging, as well as unintentional reversals, such as pests, droughts, storms and fires. A monitoring plan is required, that will identify cases of reversals.

The duration of monitoring is at least equal to the crediting period, but may be extended to increase the durability of mitigation outcomes, if specified in the methodology.

Monitoring requirements must include:

• Monitoring of SSRs selected according to Section 6.6 of ISO;

• adherence to the monitoring program, as set out in the applicable methodology;

• the frequency of measurement and reporting as defined in the relevant methodology, typically annually;

• consideration of baselines along with provisions for reevaluation at set timescales or triggers, as set out in the methodology;

• a requirement for reporting reversals to the VVB and NCS;

• identification and plan for remediation of emissions during a project's lifespan and

• monitoring reports that are published on the registry.

2.5.9 Leakage

Projects must demonstrate a robust estimate of GHG emissions outside the system boundary resulting from project activities. Leakage can also result from activity shifting or market leakage. Where potential for leakage is identified, this must be quantified and subtracted from the climate impact of the project as described in the relevant methodology.

2.5.10 Risk of Reversal

All methodologies must require a risk mitigation plan to be provided by each project. The plan must include, at a minimum:

• Identification of the possible reversal scenarios

• Actions, design elements meant to minimise the reversal risks

To address any reversals, all projects contribute a portion of verified carbon credits to a shared buffer pool, that can be used to compensate for reversals. The minimum buffer contribution is equal to 15% of verified carbon credits.

The buffer contribution may not be lowered, but it may be increased upon request by the project proponent or alternatively by the VVB as part of the project validation depending on the specific reversal risk in a given project, as specified in the relevant methodology.

3.5.1 Requirement for Conducting the Stakeholder Input Process

• If possible adverse environmental or social impacts on stakeholders are identified, a stakeholder input process prior to finalisation of the PDD is required.

• If no possible adverse environmental or social impacts on stakeholders are identified, stakeholder stakeholder input is recommended but not required.

3.5.2 Modalities of the Stakeholder Input Process

The project proponent is required to identify the relevant stakeholders, which could include IPLCs, stakeholders with land-tenure rights, local policymakers, NGOs, regional or national government, and any other groups likely to be impacted by the project.

Once identified, stakeholders must be informed of the project's proposed and current activities through accessible channels such as emails or postings in communal spaces.

The consultation process should be iterative, with multiple consultations throughout the project development process, so that stakeholders have the opportunity to influence the project design as it progresses over time.

Project proponents must ensure accessibility to encourage and enable participation. Examples of facilitating accessibility and participation are the following:

• Advance notice for consultation events.

• Accessible formats such as webinars.

• Appropriate communication channels like direct email or public notices.

• Inclusive communication by providing documentation, correspondence and meetings in the local language(s), or by including a translator where necessary.

The consultation must be transparent and free from conflicts of interest. Parties engaging with the process who have a potential or actual conflict of interest are required to declare it openly.

The consultation process must also include a grievance mechanism for stakeholders. The project proponents contact information should be readily available to all stakeholders for the submission of feedback or grievances. Grievances must be acknowledged by the project proponent with 14 days of receipt. Issues should be resolved or escalated to NCS within 60 days of receipt. All grievances must be documented and shared upon request. Any grievances received by the project proponent must be communicated to NCS within 14 days of receipt.

2.4.1 Triggers for reviewing a methodology

2.4.1.1 Methodology Update Schedule

Methodologies and modules are reviewed periodically every 5 years. Alternatively, NCS may initiate a review at any time if a significant development in technology, legislation or scientific knowledge is perceived. Such a review must be completed within 6 months of receipt of the development.

NCS reserves the right to suspend and/or withdraw a methodology if there are credible, evidence-based concerns that the climate impact is overestimated or that additionality is not ensured. In such exceptional cases, NCS may take immediate action to suspend and/or withdraw a methodology. The methodology can then be reintroduced after the usual public consultation period in the event of a material change.

2.4.1.2 Changes in Reference Standards

All NCS-certified methodologies shall be independently validated against the latest version of ISO 14064-2. Currently, this is ISO 14064-2:2019.

Methodology developers shall ensure that any reference standards they may use in their methodology, such as the CDM Additionality Tool, are up to date.

This will be routinely ensured according to the 5-year update schedule.

2.4.2 Effects of an update on existing projects and issued certificates

Projects validated according to a previous version of a methodology and verified certificates remain unchanged until the project is revalidated, unless otherwise stated in the updated methodology with an explanation.

2.4.3 Methodology Versioning

The version numbers are updated according to the standard procedure of semantic versioning, whereby three positive integers A.B.C denote the version of the methodology.

Projects are only eligible to generate credits for activities that are exclusively registered with the NCS registry. Projects are only eligible to receive credits on the NCS registry using an NCS certified methodology.

NCS or the appointed VVB may issue clarification requests (CR), corrective action requests (CAR) or forward action requests (FAR) to the project proponent during the validation process. Any such requests must be addressed by the project proponent during the validation process. A summary of the comments received will be published once project validation is complete.

At the time of project application, projects must use the latest available version of a certified methodology, unless a grace period has been explicitly specified by NCS.

Projects which have already been validated may continue to apply the version of the methodology they were validated under until the next revalidation, unless otherwise specified in the updated methodology.

Projects must comply with all relevant laws and regulations in the jurisdiction in which they operate.

The project proponent is required to notify NCS of any changes to operations that could change the eligibility of their project.

In the future, modules may also be developed to measure and certify social or environmental co-benefits attributable to projects and the mitigation outcomes they generate. These will be designated as co-benefit modules.

Projects must comply with all relevant European Union, local, and national laws and regulations related to environmental and social impacts.

Project proponents are responsible for assessing environmental and social risks associated with the project, ensuring potential adverse impacts are identified and mitigated. Environmental and social impacts must be assessed as part of the project design, with ongoing evaluations as necessary, scaled appropriately to the nature and impact of forestry projects.

All projects are required to adhere to the "Do No Harm"-Principle.

3.7.1 Environmental Impacts

• Mitigation and Remediation: The project proponent must implement preventative measures to avoid environmental harm. Should unintentional environmental harm occur, the project proponent is responsible for timely remediation to restore any impacted areas.

• Impact Minimisation in Forestry Context: Given the low-impact nature of forestry projects, assessments are simplified. Key environmental impacts to consider include:

  • Biodiversity conservation, specifically avoiding unnecessary harm to local flora and fauna.

  • Prevention of soil degradation, erosion, and water stress through sustainable forestry practices.

  • Avoidance of pollution or waste generation that could impact local ecosystems.

3.7.2 Social Impacts

• Social Risk Assessment: Projects must conduct a baseline assessment of social risks, with particular attention to potential impacts on IPLCs, and any other relevant stakeholders.

• Labour Rights and Community Interaction: Although risks in European forestry projects may be limited due to the high standards of labour rights across the EU, project proponents must ensure:

  • Safe and fair working conditions for any hired workers.

  • Non-discriminatory practices in hiring and treatment.

  • Protection of any Indigenous or community rights related to land or resources.

3.7.3 Sustainable Development Impacts

• SDG Relevance and Alignment: If applicable, Projects must demonstrate contributions to the Sustainable Development Goals (SDGs) relevant to the project, except SDG 13 (Climate Action) and SDG 15 (Life on Land).

• Documentation of Positive Impacts: A brief, qualitative assessment of the project’s positive SDG impacts must be included in the PDD.

• Tools and Methods: The project proponent must outline any standardised tools or methods used to assess SDG contributions.

3.7.4 Waivers

If the project proponent provides evidence demonstrating that the submitted lands comply with a forest certification that upholds higher environmental and social standards, the requirements outlined in sections 3.7.1 and 3.7.2 may be waived.

The VVB will verify proof of compliance with the following recognised certifications:

• Forest Stewardship Council (FSC)

• Programme for the Endorsement of Forest Certification (PEFC)

3.7.5 Template

The project proponent may use a template provided by the NCS to conduct the environmental and social risk assessment.

Projects must demonstrate that they have legal ownership over the rights to all carbon credits that will be claimed from the project. They will have to prove this to NCS.

When there are multiple parties involved in the project, for example a project developer and a forest owner, a single beneficiary must be specified as the sole owner of the carbon credits.

The matter of ownership must be defined in contracts between the project proponent and other project participants.

VVBs are required to be free from any conflicts of interest with the project and project proponent who they are contracted to audit. To mitigate potential conflicts of interest between the project proponent and the VVB, NCS will take responsibility for selecting and engaging VVBs for project validation and verification. Additionally, all VVBs are required to submit a conflict of interest disclosure prior to engagement.

VVBs are beholden to the NCS conflicts of interest policy, where they fall into the category of contractors to NCS.

NCS requires that projects work with a single VVB for no longer than five consecutive years. Once this limit has been reached, that VVB may not work with the project for two years.

This section outlines the requirements for validation and verification of projects on the NCS registry. Accredited VVBs validate projects and verify mitigation outcomes in line with the NCS standard and relevant methodology.

NCS will make important data on all projects publicly available. This includes:

• Project design document

• Monitoring reports

• Validation and verification reports

The project proponent may request for confidential information to be restricted. In such a case, the information will only be available to authorised buyers, NCS and the designated VVB.

All VVBs must be approved by NCS based on alignment with conflict of interest policies, rotation of VVB policies, oversight on quality, and the following requirements:

• All projects on the NCS registry must be audited as set out in ISO 14064-2:2019. This means that a VVB must be accredited to carry out validation and verification as set out in ISO 14064-3:2010.

• VVBs must be able to demonstrate accreditation from:

  • An International Accreditation Forum (IAF) member against ISO 14065 or

  • a relevant governmental or intergovernmental regulatory body.

All projects must be validated by an independent VVB, to assess conformity with the NCS standard, and with the applied methodology. After validation, the project can claim mitigation outcomes to NCS. These claimed mitigation outcomes must be verified in order to issue credits. As set out in ISO 14064-2:2019 sections 6.12 and 6.13, validation and verification is carried out in line with ISO 14064-3. In addition, the following requirements apply:

• The validation and verification process must be carried out in line with ISO 14065.

• Mitigation outcomes must be verified at the cadence specified by the relevant methodology.

• Project validation may occur at the same time as the first verification, or before the first verification.

• Project validation and the first verification must be conducted with an on-site audit. For subsequent verifications, the VVB must assess the need for on-site verification.

• The required level of assurance for verifications is "reasonable", as defined in ISO 14064-2:2019.

The project proponent must also establish and maintain a monitoring plan that is coherent with section 6.10 of ISO 14064-2:2019.

The VVB must produce a report on the verification process and outcome. This report needs to adhere to the requirements set out in ISO 14064-3:2019.

Following this process, NCS will review the project documents used for validation and verification and either accept them, request clarifications or corrections from the project proponent or VVB, or reject them. Once the initial validation report for a project is approved by NCS, the project will be listed as validated on the registry.

For validations and verifications, the results of the validation and verification processes, including the validation report, will be made publicly available for each project.

Retirement is the process by which a credit's ownership state is finalised. This ensures that once the net tonne of CO₂e represented by the retired credit is applied to an accounting activity (e.g. offset or contribution to host country NDCs), it can never be used again by the owner, the beneficiary of the retirement, or any other party.

The beneficiary of a retirement is the organisation on whose behalf the credit was retired, this must be publicly identified. Beneficiaries can either be the current holder of the credit at the time of retirement or an organisation specified by the credit account holder during the retirement process. Credit account holders can retire credits by following the retirement procedure through their credit account on the registry.

The owner of an unretired credit may publicly market its ownership, as well as the potential for the credit to be retired by any current or future owners. However, only the beneficiary of a retired credit can claim the environmental benefits associated with that credit.

Retirement is governed by the following rules:

• A credit account holder can only retire credits they own, which are in their credit account.

• A credit can only be retired once.

• Any number of credits can be retired at any given time, provided the total does not exceed the number of credits held by the credit account.

A credit can only have a single owner at any give time, with its full ownership history being tracked and made publicly accessible. Each credit is issued ex-post against a net verified mitigation outcome, ensuring that every net tonne of CO₂e mitigated is credited and accounted for only once, and that every credit is traceable back to this specific mitigation activity.

Every credit has a publicly accessible ownership history that details when it was first issued, to whom it was issued, any subsequent deliveries or transfers, and if and when it was retired, including information about who retired it and on whose behalf.

Upon issuance, a credit’s status is marked as active. When a credit is retired, its status changes to retired. Likewise, if a credit is canceled (for instance, to compensate for an erroneous over-issuance or a reversal as outlined in the reversals and buffer pools), its status becomes canceled.

Credit metadata include:

• Type of mitigation outcome;

• Unique serial number;

• Issuance date;

• Issuing project;

• Issuing project proponent;

• Ownership history, including the current owner (the owner who is retiring the credit) and all previous owners and transfer dates;

• Retirement date;

• Retirement beneficiary; and

• Credit status.

Project proponents can make deliveries to buyer credit accounts, resulting in the transfer of ownership of one or more newly issued credits. Further transfers can be made by credit account holders to other credit accounts, transferring ownership of one or more credits. For each credit, the initial delivery and all subsequent transfers are recorded and made publicly available in the credit's history.

Project proponent deliveries are governed by the following rules:

• Project proponents can only deliver credits that have been issued.

• Project proponents can only deliver credits that they own.

• Project proponents can only deliver credits to buyers with an active Nature Climate Standard account.

Buyer transfers are governed by the following rules:

• Buyers can only transfer credits that they own.

• Buyers can only transfer credits to another organisation that has a credit account on the Nature Climate Standard registry.

The threshold for materiality is 5% for all Projects. The discrepancy between reported mitigation outcomes and what the auditor determines to be the real mitigation outcomes must not exceed this threshold.

Materiality issues can also be of a qualitative nature. These can be identified and documented, such as:

• control issues that erode the verifiers confidence in the reported data;

• poorly managed documentation;

• difficulty in locating requested information.

Retirement certificates provide proof of the retirement of one or more credits and are generated only upon the completion of a retirement. Each retirement certificate corresponds to one or more retired credits. If multiple credits are retired at once, the certificate will list all the retired credits. retirement certificates demonstrate the connection between the retired credits and the mitigation activity from which they originate.

In addition to the qualification requirements, NCS is empowered to oversee VVB activity during the validation and verification process. Oversight can include review of VVB documentation, including verification plans, reports, opinions and conflict of interest disclosures, as well as review of project proponent documentation.

NCS may suspend approval of a previously approved VVB and will report significant and/or repeated VVB performance concerns to the relevant accreditation body.

Introduction

Clarity is essential in the complex field of forest-based carbon projects. This glossary provides definitions for terms used in the Nature Climate Standard (NCS), fostering a shared understanding among project developers, validators, and stakeholders. Many of these definitions are specific to NCS, while others draw from internationally recognized standards, including ISO 14064-2 as well as broader industry terminology.

This glossary ensures consistency across NCS documentation and simplifies complex concepts for ease of reference. Terms borrowed from other sources are cited to provide full transparency. Please use this glossary to guide your engagement with NCS methodologies, project requirements, and verification processes.

Glossary

Additionality

The principle that carbon credits generated by a project must result from actions that would not have occurred under a "business-as-usual" scenario. Additionality ensures that the mitigation outcome is genuinely contributing to climate goals beyond existing practices.

Baseline Scenario

A hypothetical scenario used to estimate greenhouse gas (GHG) emissions or removals that would have occurred without the project intervention. The baseline scenario is critical in calculating additional emissions reductions or removals achieved by the project.

Buffer Pool

A reserved collection of carbon credits set aside to cover risks of reversal in carbon storage. In case of carbon loss due to unforeseen events, buffer pool credits are used to compensate, ensuring the integrity of the credited mitigation outcomes.

Carbon Credit

A tradable unit representing one metric ton of carbon dioxide equivalent (CO₂e) emissions reduced or removed from the atmosphere. Each credit in the NCS registry is issued following verified mitigation outcomes from forestry projects that meet NCS standards.

Carbon Sequestration

The process of capturing and storing atmospheric carbon dioxide in a carbon sink, such as a forest. This natural process reduces the overall concentration of CO₂ in the atmosphere, contributing to climate change mitigation.

Crediting Period

The time frame during which a project is eligible to generate carbon credits. The NCS requires re-validation and adherence to updated methodologies for crediting period renewals.

Double Counting

The risk of counting the same emissions reduction or removal more than once. Double counting may occur through double issuance, double claiming, or double use. NCS methodologies ensure robust measures to prevent double counting within the registry.

Durability

The length of time that the carbon stored by a project is expected to remain sequestered, with a minimum durability period of 30 years for NCS-certified projects. Durability is essential to ensure the permanence of claimed mitigation outcomes.

Emissions Avoidance

Actions taken to prevent the release of carbon dioxide or other GHGs into the atmosphere. Projects that successfully demonstrate emissions avoidance, such as protecting existing forests, may generate carbon credits under the NCS.

Emissions Reduction

A decrease in GHG emissions as compared to baseline levels. In forestry projects, emissions reductions may result from improved forest management or reduced deforestation.

Environmental Impact Assessment (EIA)

A structured assessment to identify and mitigate the environmental risks associated with a project. The EIA for NCS projects includes impacts on biodiversity, soil health, water management, and the minimization of ecological harm.

Forest Carbon Project

A forestry-based initiative designed to sequester or reduce GHG emissions, thereby generating carbon credits. Eligible NCS forest carbon projects include activities such as reforestation, afforestation, and improved forest management.

Leakage

The unintended increase in GHG emissions outside of a project’s boundary as a result of project activities. NCS requires quantification and, where possible, mitigation of leakage to ensure accurate accounting of the project’s climate impact.

Methodology

A structured set of criteria and procedures defining how a project must be implemented, monitored, and verified to meet NCS standards. Methodologies may be adapted to reflect country-specific forestry and regulatory contexts.

Mitigation Outcome

The total net reduction, removal, or avoidance of GHG emissions achieved by a project, resulting in carbon credits. NCS evaluates mitigation outcomes based on adherence to ISO 14064 standards and additional NCS requirements.

Monitoring Plan

A documented approach detailing the methods and frequency for measuring and verifying GHG emissions reductions or removals in a project. NCS mandates monitoring plans for all projects to ensure transparent and reliable crediting.

Permanence

The durability of GHG mitigation benefits achieved by a project, specifically referring to the prevention of reversals. NCS projects are required to demonstrate permanence through robust monitoring and buffer contributions.

Project Design Document (PDD)

The foundational document that describes a project’s design, objectives, and adherence to NCS standards. The PDD is reviewed during validation and must cover baseline scenarios, additionality, and risk assessments.

Project Proponent

The individual or organisation responsible for implementing and managing a project. Project proponents must demonstrate ownership rights, compliance with NCS requirements, and accurate documentation of project outcomes.

Reforestation

The process of replanting trees on land that was previously forested but has since been deforested. Reforestation projects serve as carbon sinks and contribute to biodiversity and ecosystem restoration.

Reversal

The loss of sequestered carbon from a project due to factors such as fire, pest infestation, or land-use change. NCS addresses reversals through buffer pool contributions and monitoring requirements to compensate for any losses.

Silvaconsult Account

A specialized account for each project proponent where credits are reserved to address potential reversals. The account size is adjusted based on the project’s reversal risk and is managed in line with NCS’s crediting approach.

Stakeholder Consultation

The process of engaging relevant stakeholders, including local communities and environmental groups, in project development. Stakeholder input is especially important when projects may have social or environmental impacts.

Validation

The initial assessment process by an independent Validation and Verification Body (VVB) to confirm that a project meets NCS standards and is eligible to generate carbon credits.

Verification

The periodic audit and confirmation by a VVB that the mitigation outcomes of a project are valid and accurately quantified. Verification is required annually for NCS projects to ensure the integrity of issued credits.

All projects must be validated against an NCS-certified methodology and the corresponding mitigation outcomes must be verified against the methodology.

NCS recognises two types of mitigation outcomes:

• Emission Avoidance – The

An NCS-certified methodology

• has been developed either by NCS, partners contracted by NCS or third-parties,

• is independently validated against ISO 14064-2:2019,

• fulfils all NCS requirements,

• has undergone a public consultation and

• is listed as certified in the NCS registry.

NCS will provide feedback to new methodologies at any stage. For example, a concept note may be submitted for review before full development of a methodology is initiated.

NCS reserves the right to reject any methodology at its sole discretion, such as when a reputational risk is perceived.

5.6.1 General

This section outlines how reversals are handled on the NCS registry, through the use of buffer pools.

All reversals will be reviewed by the NCS team.

It is important to note that changes to calculations resulting from updates to methodologies are not considered reversals and generally will not affect previously issued credits. However, the NCS will monitor for significant impacts due to methodology updates to ensure overall quality and address system-level impacts (e.g., considerable evolution of scientific consensus).

5.6.2 Reversals

Project proponents must monitor for reversals as specified in a project's monitoring plan and promptly report any reversals to the NCS if identified. At the verification following a reversal, the project proponent must report the relevant monitoring data for any reversal that has occurred, which will be assessed by the verifier as part of the verification process. Reversal data from projects will be made public.

When a reversal is identified, credits will be canceled from the shared buffer pool to compensate for the reversal. The number of credits to be canceled must equal the size of the reversal.

In cases of gross negligence or fraud, the liability falls directly on the project proponent. If it is found that a reversal occurred due to intentional misrepresentation of data or failure to uphold agreed-upon monitoring and reporting standards, the buffer pool can not be used and additional penalties may be imposed. These penalties may include increased buffer pool contributions, suspension of future credit issuance, or removal of the project from the registry. The NCS reserves the right to take legal action in extreme cases of fraud.

If project assumptions such as the starting stock (e.g., initial carbon stock levels) are found to be significantly different from what was initially reported—whether higher or lower—these changes must be addressed immediately. If the initial assumptions were overly optimistic or underestimated, the project proponent must recalibrate the project’s GHG accounting accordingly. This may involve adjusting the baseline and, in some cases, recalculating the amount of credits already issued.

5.6.3 Buffer Pool

The main insurance mechanism to address uncertainty in storage and compensate for reversal events is the shared buffer pool. All projects transfer 15% of the issued verified mitigation outcomes to the buffer pool. Methodologies may set a higher default buffer contribution, but the buffer contribution may not be lower than 15%.

Credits in the buffer pool cannot be used for any other purpose than cancellation to compensate for reversals.

Furthermore, reversals are classified as either avoidable or unavoidable, as determined by the NCS, in consultation with selected VVB(s) and/or independent subject matter experts.

In the case of an avoidable reversal, the project proponent is responsible for replacing lost credits needed to guarantee the integrity of claims made by buyers. This can mean purchasing credits equal in character and quality to NCS credits, as determined by NCS, to compensate for the reversal.

If an unavoidable reversal occurs, such as through force majeure, the project proponent may draw from the shared buffer pool.

The Nature Climate Standard has established rules and procedures to mitigate the risk of double counting, which can occur in various forms, including double issuance, double use, and double claiming.

Double issuance (when more than one unique unit is issued for the same mitigation outcome) is not allowed, and the Nature Climate Standard has checks in place to prevent this. Any mitigation activity listed on the Nature Climate Standard registry must not be listed on another program and cannot be used to make a separate mitigation claim elsewhere. ISO 14064-2:2019 outlines that the project proponent must adhere to rigorous reporting procedures (Section 6.13) to ensure transparency and prevent errors or duplications in claims.

Double use (when an issued credit is further transferred, used, or retired after already being retired) is prevented through a transparent, public record of all credits and retirements. This ensures that all retirements used for mitigation target claims can be uniquely identified and traced back to the specific mitigation outcome activity the credit was issued against. Once a credit has been retired, it cannot be used again. The use of the credits is strictly limited to the voluntary carbon market for climate protection measures.

Double claiming (when an issued credit is claimed twice toward achieving mitigation targets or goals) is not permitted on the Nature Climate Standard registry. For any credit, no separate mitigation claims can be made for the underlying mitigation outcome from which the credit was issued. The Nature Climate Standard will monitor for instances of double claiming, and credit account users engaging in double claiming may have their credit account suspended.

The sixth assessment report of the Intergovernmental Panel on Climate Change (IPCC) states that the sector “Agriculture, Forestry, and Other Land Use (AFOLU)” was responsible for an average of 13-21% of total anthropogenic greenhouse gas emissions globally between 2010 and 2019.

The IPCC report notes that the LULUCF sector offers significant mitigation potential in the near future while also providing food, wood, and other renewable resources, as well as conserving biodiversity. Mitigation measures in forests and other natural ecosystems account for the majority of the LULUCF mitigation potential between 2020 and 2050.

The 2015 Paris Agreement requires in Article 5 that carbon stocks in forests be maintained or increased. This explicitly recognises forest carbon sequestration as a measure to reduce CO2 concentrations in the atmosphere. Under this premise, climate protection projects in forests make a highly valuable contribution to achieving the climate goal set in Paris of limiting global warming to a maximum of 1.5°C by 2100.

2.6.1 Purpose

The Nature Climate Standard seeks to harmonise the definition of quality among European forest project developers while also providing a governance framework that aligns with international standards.

2.6.2 Eligibility

This policy applies to projects developed under a methodology prior to its initial certification by the NCS.

2.6.3 Procedure

2.6.3.1 Notification

Owners / Administrators of existing projects will be notified of the methodology's certification and provided with guidance on how to transition their project into the NCS framework. Notifications will occur 30 days after the certification is announced at the latest.

2.6.3.2 Transition Period

A 12-month transition period is granted for projects to demonstrate compliance with the newly certified methodology. During this time projects may continue to operate as they originally did but must make the necessary adjustments to fully comply with the NCS.

2.6.3.3 Simplified Application for Validation

Project owners / administrators must submit a simplified revalidation application that includes:

• Proof of compliance for the project under the previous methodology, including PDD and validation / verification statements;

• updates or changes required to meet NCS standards;

• any special considerations.

Project developers who administer multiple projects under the same methodology may submit a summary application that includes:

• List of projects that are to be grandfathered in;

• proof of compliance for all projects under the previous methodology, including PDDs and third-party validation / verification reports;

• updates or changes required across all projects;

• any special considerations that apply to individual projects.

On the basis of these documents, NCS will be able to verify adherence to the previous methodology. Provided there are no issues with compliance, projects must only demonstrate that they have closed the delta between the previous and updated methodology.

Once the application has been received and acknowledged, the project to be grandfathered in is listed on the registry as "undergoing validation".

2.6.3.4 Third-Party Verification

Projects transitioning through the grandfathering process must be verified by an NCS-accredited VVB during the transition period. This may be conducted as part of the regular verification process. Re-validation of projects may be necessary, dependent upon the nature of the changes and updates made to the methodology in question.

Legend:

1. VVB qualification

   2. does not meet NCS requirements

2. Methodology changes

   1. significant (changes that have a material impact on the issuance of carbon credits)

   2. minor (smaller issues that have no material impact on the issuance of carbon credits)

Note that NCS reserves the right to require re-validation of any project during the grandfathering process.

2.6.3.5 No Compromise on NCS Integrity

Projects must meet all NCS and ISO 14064-2:2019 requirements before being fully certified. This includes meeting all methodological requirements, such as accurate quantification, reliable baselines and strong additionality.

2.6.3.6 Crediting

Carbon credits issued before entering the grandfathering process cannot claim to be NCS-compliant under any circumstance. Where methodology changes are minor, credits issued during the transitional phase may be transferred to the NCS registry after the grandfathering process has been completed successfully.

Projects that exceed the 12-month transitional phase (or the granted extension) will no longer be eligible to claim mitigation outcomes until they achieve compliance.

2.6.3.7 Completion and Validation

Once the grandfathering process has concluded with a positive VVB report confirming compliance with the new NCS-certified methodology, the project will be listed on the registry as "validated".