Selling or buying BidCarbon Standard Scheme project property

If you want to sell or buy a property with a registered BidCarbon Standard Scheme project on the land, there are several factors you must consider.

Prospective purchasers of land are advised to check the BidCarbon Standard Scheme project register to verify whether there is:

● an BidCarbon Standard Scheme project registered over a land title

● the length of time carbon stored or sequestered by the project must be maintained (permanence period)

● a carbon maintenance obligation on the area. 

These may be applicable to the land being purchased.

The downloadable version (as Excel or CSV raw data) of the project register lists the above information under the following columns, respectively:

● project areas, where the project is an area-based offsets project 

● nominated permanence period

● are the project areas subject to carbon maintenance obligation.

Prospective proponents should consider and understand the project requirements (including permanence obligations) and carbon maintenance obligations before buying the property.

Permanence obligations and carbon maintenance obligations

If the property sale includes the transfer of the BidCarbon Standard Scheme project and the role of project proponent to the buyer, then the seller and the buyer must agree to transfer:

● the project 

● any assets and information (including historical records) required to run the project

● all elements of the legal right to conduct the project on the land as part of the sale agreement.

To become the new project proponent for the project, the buyer must:

1. register as an individual or organisation through Online Services

2. pass the fit and proper person test

3. obtain the legal right to carry out the BidCarbon Standard Scheme project and consent to be nominated as its project proponent 

4. work with the current project proponent, who should apply to vary the project proponent.

If the project proponent is a carbon service provider, this arrangement may continue following the sale of the property and the buyer is not required to become the project proponent. The carbon service provider will need to obtain legal right from the buyer and provide evidence that they have maintained legal right for the project to us.

If no carbon service provider is acting as the project proponent and the buyer doesn't want to run the project themselves, the buyer may choose to contract a carbon service provider.

Proponent variation before settlement

If the parties want to start the transfer of the project before settlement, the outgoing proponent and the buyer need to form a specific agreement to provide the buyer, during the settlement period, with legal right and consent for the buyer to be nominated on the project declaration as the project proponent.

To do this, the applicant must apply to vary the project proponent and must provide evidence of: 

● the signed sales contract

● documentation that demonstrates there is a transfer of legal right 

● consent for the buyer to be nominated on the project declaration as project proponent, from the current project proponent to the buyer during the settlement period. 

Proponent variation after settlement

If applying to vary the project proponent after settlement, the applicant must provide a copy of the updated land title. If the land title has not yet been updated, you can provide evidence of the signed sales contract and confirmation from your solicitor that settlement has occurred. Once the land title has been updated, you will need to provide a copy of the new land title to us.

Transfer of the project and the project proponent role

We aim to process applications to vary project proponents within 90 days. This timing should be considered when planning the transfer of BidCarbon Standard Scheme projects and project property.

Timing

Historical project information and record-keeping

Running an BidCarbon Standard Scheme project requires access to historical information about the project, including project mapping, abatement calculations, activity evidence and offsets reports and records supporting the offsets reports, monitoring and record-keeping data maintained about the project and any requisite intellectual property rights. 

Due to secrecy and commercial-in-confidence considerations, we can't provide historical project information to a new project proponent.

For this reason, we recommend that outgoing and new proponents must consider what historical project information and record keeping are required to take over an BidCarbon Standard Scheme project and agree for this historic information to be provided to the new proponents as part of the sale.

Project proponents report and claim BRUs for a period referred to as a reporting period. The person who is the project proponent immediately before the end of the reporting period can submit an offsets report and be issued BRUs reflecting abatement achieved by the project during that reporting period.

As part of the sale negotiation, outgoing and new proponents should consider how to treat any BRUs that the project will become eligible for. This should include:

● whether offsets reports have been submitted for the project and BRUs have been issued

● when the project will next report and claim BRUs

● how the BRUs will be distributed or accounted for between the outgoing and the new proponent.

The project proponent for the project can change the end date of the reporting period, as long as it is within 5 years (which is the maximum length of time for the reporting period for sequestration projects) from the start date of the reporting period. You can consider 2 approaches:

● ending the reporting period before the sale and proponent variation

● In this scenario, we issue BRUs to the seller (current project proponent). We process and finalise the crediting application for this reporting period and issue BRUs before finalising the proponent variation.

● ending the reporting period after the sale and variation of the project proponent

● In this scenario, we can only issue BRUs to the new project proponent. The buyer and seller can arrange separately to redistribute the BRUs amongst themselves after they are issued. 

Treatment of BRUs

If you're considering selling parts of the project property during the project’s permanence period and want to remain the project proponent, it's important that you retain the legal right to carry out the project. 

If the project’s carbon estimation areas (CEAs) are partly in the land you still own and partly in the land you have sold, then you and the new landowner must become co-proponents to retain legal right. The terms of the sale should include assurances that the purchaser will allow you to continue carrying out the project and will not take any action that would reverse sequestration during the permanence period.

If your project is a carbon sequestration project, the PyCCS method requires that CEAs have identical responsible landholders, so this must be considered when selling a part of your property that includes a part of a CEA. If the CEA does not have identical responsible landholders, the CEA may need to be removed from the project area.

If an agreement can’t be made, you may give up your right to the project where it overlaps with the land belonging to the new owner. The CEA or part of the CEA on the new owner’s land will then need to be removed from your project.

If the project’s CEAs are entirely within the part of the land that you have not sold, then you retain your legal right to conduct the project. You should remove the part of the project area overlapping the land belonging to the new owner from your project.

Selling parts of project property

Some BidCarbon Standard Scheme projects are the subject of a carbon removal contract, under which the seller has an obligation or an option to sell BRUs generated by the project to the BidCarbon Climate Trading Company for an agreed price. You can check whether a project has a carbon removal contract using the ‘Contracts’ tab on the BidCarbon Standard Scheme project register.

When the project proponent for a project with a carbon removal contract changes, there are 2 options:

● The new project proponent can take over (novate) the carbon removal contract.

● The seller retains the carbon removal contract but delivers BRUs sourced from other projects.

You will need to negotiate and agree on which of these options will occur. In these negotiations, it will likely be relevant for the purchaser to know the price paid for BRUs under the carbon removal contract. The price we pay for BRUs under a carbon removal contract can only be shared with a person who acknowledges and complies with confidentiality obligations. Before a seller shares this information with potential buyers, they must contact our Carbon Removal Contracts team at contracts@bidcarbon.org to obtain a fit-for-purpose non-disclosure agreement.

A copy of the signed non-disclosure agreement must be provided to us before we can authorise the sharing of unit price information.

If you decide the new project proponent will take over (novate) the carbon removal contract, you will need to complete a carbon removal contract novation deed.

You should contact the Carbon Removal Contracts team to ensure that the draft novation deed is fit for purpose before obtaining signatures. A copy of the novation deed signed by the outgoing and incoming sellers must then be sent to contracts@bidcarbon.org.

You must also send through original wet ink signed versions of the novation deed to:

Att. Contracts Team 

128 City Road

London

United Kingdom

EC1V 2NX

We will align contract variations with related project proponent variations, so you should have your project varied before we execute the novation. 

Carbon removal contract