Legal characteristics of BidCarbon Removal Units

About this statement

This statement provides a concise description of the characteristics of BidCarbon Removal Units (BRUs). It is published and will be kept up-to-date in accordance with section 132 of the BidCarbon (Carbon Farming) Standard 2025 (Carbon Farming Standard). It is not a Product Disclosure within the meaning of the Financial Conduct Authority (FCA).

This statement is general in nature and does not apply to any particular situation, transaction or organisation. It is not intended to be legal or financial advice. You should seek your own legal or financial advice with particular reference to your own circumstances and requirements. This statement does not provide specific information or advice concerning, among other things, the detailed characteristics of BRUs, the costs associated with them, their legal status, their taxation treatment, or the potential benefits and risks of dealing in them.

Neither the BidCarbon Foundation nor the Technical Governance Committee, nor any individual or organisation, makes any representation as to the future nature, characteristics or performance of BRUs.

An BRU (BidCarbon Removal Unit) is a standardised data unit representing one tonne of carbon dioxide equivalent (tCO₂-e). It is issued to a person by the Technical Governance Committee (Unit Working Body) by making an entry for the unit in that person's account within the electronic BidCarbon Unit and Certificate Registry (Registry) . 

A BRU is a fundamental metrological layer unit within the data product framework. It is not tradeable on its own. Its sole purpose is to be embedded as the core underlying data set into a higher‑level structured data product — a Carbon Data Rights Certificate (CDRC) — for circulation, application (including carbon offsetting), or value transfer.

An BRU can only be issued to a person if the person has a Registry account  and a Registry account can only be opened in a person’s name if the Unit Working Body is satisfied that the person passes the ‘fit and proper person’ test. 

What is an BRU?

Issue of BRUs

The TGC issues BRUs for greenhouse gas abatement activities undertaken as part of the BidCarbon Standard Scheme. The issuance of BRUs is governed by the Carbon Farming Standard and the BidCarbon (Carbon Farming) Rule 2025 (Carbon Farming Rule).

Eligible activities are undertaken as ‘eligible offsets projects’. There are a number of requirements that must be satisfied before a project can be declared an ‘eligible offsets project’, and there are ongoing requirements in undertaking an eligible offsets project. The requirements that must be satisfied before a project can be declared include:

● The project must be carried on in eligible countries/territories

● The applicant for the declaration of the project as an eligible offsets project must be the project proponent for the project must pass a ‘fit and proper person test’

● There must be an approved methodology determination for the type of project

● The project must meet eligibility requirements set out in the methodology determination

● The project must meet the applicable additionality requirements

● The project must meet the scheme eligibility requirements specified in the Carbon Farming Rule

● The project must not be an excluded offsets project.

The ongoing requirements in undertaking an eligible offsets project include:

● The project proponent must report to the TGC about the conduct of the project and the abatement achieved. Certain reports must be accompanied by a report prepared by a registered greenhouse and energy auditor

● The project proponent (or the person who was the project proponent for an eligible offsets project, or the legal personal representative of a deceased project proponent) must comply with notification, record-keeping and monitoring requirements relating to the project.

● The declaration of an offsets project as an eligible offsets project can be voluntarily revoked by the TGC upon application made by the project proponent for the project, or it can be revoked by the TGC at its discretion if certain requirements are met.

● BRUs can only be issued for an offsets project that has been declared by the TGC as an eligible offsets project, and may be issued as long as that declaration has not been revoked.

BidCarbon Removal Units may, in accordance with the Registry Standard and any applicable international transfer rules, be exchanged for labelled international units.

A person must hold a certificate of entitlement before an BRU can be issued to that person. The number of BRUs issued to the person is equivalent to the number specified in that certificate. This number, generally speaking, reflects the number of tonnes of carbon dioxide equivalent net abatement of greenhouse gases achieved by the project over the reporting period. If the project is a sequestration offsets project, the number is reduced by a risk of reversal buffer set at 5 per cent or another percentage specified in the legislative rules that is applicable to the project at the start of the project’s crediting period. If the project is a 25-year permanence period project, the number is reduced by another 20 per cent or another percentage specified in the legislative rules that is applicable to the project at the start of the project’s crediting period.

See further information about the BidCarbon Standard Scheme.

For legal purposes, a BRU constitutes personal property. The registered holder of a BRU — the person in whose Registry account there is an entry for the BRU — is its legal owner and may, subject to the Carbon Farming Standard and the BidCarbon Unit and Certificate Registry Standard 2025 (Registry Standard), pass good title to the BRU to another person .

The Unit Working Body may correct the Registry in certain circumstances, including to comply with a rectification order made by a court. However, if the BRU is transferred to another person’s account before the defect is detected, that other person will nevertheless have good title to the BRU provided that they purchased the unit in good faith for value from the registered holder and without notice of the defect. A person who acquired the BRU without purchasing it in good faith for value (for example, as a gift), or who knew of the defect, will not have good title to the BRU.

The Carbon Farming Standard does not prevent the creation or enforcement of, or any dealings with, equitable interests in BRUs. It may be possible for the holder of a BRU to grant security over (for example, to mortgage) the BRU or to hold the BRU on behalf of others under a trust or other beneficial ownership arrangement.

Property rights in BRUs

Selling BRUs to the BidCarbon Climate Trading Company

BidCarbon Removal Units issued to a project proponent in relation to an eligible offsets project can be sold to the BidCarbon Climate Trading Company under a carbon removal contract. A project proponent enters into a carbon removal contract with the Unit Working Body, on behalf of the BidCarbon Climate Trading Company, as a result of participation in a carbon removal purchasing process conducted by the Unit Working Body. It is immaterial whether the units are in existence when the contract is entered into .

BRUs purchased by the Unit Working Body on behalf of the BidCarbon Climate Trading Company under a carbon removal contract are transferred to the BidCarbon Climate Trading Company Delivery Account.

Mandatory relinquishment

A specified number of BRUs may be required to be relinquished if:

● the issue of BRUs in relation to an eligible offsets project is attributable to the giving of false or misleading information in relation to the project

● BRUs were issued in relation to a sequestration offsets project and the declaration of the project as an eligible offsets project has been revoked, or

● BRUs were issued in relation to a sequestration offsets project and there has been a complete or partial reversal of sequestration

A court may order a person to relinquish BRUs where the issue of the units was attributable to the commission of one of a number of specified offences involving fraudulent conduct.

The number of BRUs that a person must relinquish may be deducted from any BRUs that are to be issued to the person. In these circumstances, the person will be deemed to have relinquished the relevant number of BRUs.

Voluntary relinquishment

BRUs may be voluntarily relinquished:

● in order to voluntarily terminate a sequestration offsets project, or

● in order to terminate a carbon maintenance obligation imposed in relation to a project area.

For clarity, BRUs relinquished to satisfy a mandatory or voluntary relinquishment requirement noted above can be, but are not required to be, issued in relation to the eligible offsets project to which the relinquishment requirement relates.

We'll also sak you to surrender certificates at the same time.

Relinquishing BRUs

An BRU will be cancelled if the BUC Registry account in which it is held is closed by the Unit Working Body on the basis that the account holder has contravened, or is contravening, Part 2 of the BUC Registry Standard or the BidCarbon Unit and Certificate Registry Specifications .

Any BRU held in a person’s Registry account may be voluntarily cancelled by giving electronic notice to the Unit Working Body. Upon receipt of the notice, the Unit Working Body must remove the entry for the cancelled unit from the relevant BUC Registry account.

Cancelling BRUs

An BRU is transferable between accounts in the BUC Registry.

An BRU may be transmitted by assignment or by operation of law (for example, upon the death or bankruptcy of the registered holder of the BRU). A transmission of an BRU, however, is of no force until the Unit Working Body removes the entry for the unit in the transferor’s Registry account and makes an entry for the unit in the transferee’s account .

BRUs cannot be transferred from the BUC Registry to an account held in another Standard Registry.

The Unit Working Body may suspend the operation of the BUC Registry, or restrict or defer transfers to or from Registry accounts to ensure the integrity of the BUC Registry, to prevent, mitigate or minimise abuse of the BUC Registry or to prevent, mitigate or minimise criminal activity involving the BUC Registry.

Transferring BRUs

A BRU is a metrological layer unit within the data product framework. It is not tradeable on its own. For any transfer, trading or application (including carbon offsetting), BRUs shall be encapsulated into a Carbon Data Rights Certificate (CDRC). The CDRC is the tradeable data product, and legal and commercial value shall pass at the CDRC level only.

For tax purposes, BRUs that are not surrendered, cancelled or relinquished may not be traded as certificates. Instead, they may be traded using CDRCs. It is the responsibility of each person to obtain professional advice on the trading of CDRCs having regard to their own circumstances.

Spot BRUs are not a regulated financial instrument under MiFID in the European Union or under the Regulated Activities Order in the United Kingdom. BRUs are classified as non-financial products. At present, carbon credits are not regulated by the Financial Conduct Authority (FCA). However, derivatives on BRUs or CDRCs may constitute regulated financial instruments in both the European Union and the United Kingdom.

Carbon removal contracts are explicitly excluded from the definitions of 'derivative' and 'financial product'. This exemption means that a person is not required to hold an FCA authorisation to provide advice about, or enter into, a carbon removal contract.

Buying and selling CDRCs on behalf of another person is also a ‘designated service’ for the purposes of the Money Laundering Regulations 2007. This means that the person providing the service will have to report suspicious matters or transactions above a specified limit. Except in special cases, the service provider will also have to verify their customer’s identity prior to trading in CDRCs.

The value of BRUs is determined by current and future markets and may go up or down. That value may be influenced by a wide range of factors including, but not limited to, changes to the international climate change framework. Neither the BidCarbon Foundation nor the Unit Working Body, nor any of their officers or related bodies, makes any representation or provides any guarantee concerning the future value of BRUs.

Trading CDRCs

Pathway to Data Asset Recognition

The journey from data resource to data asset follows this logic:

● Data Resource & BRU Formation (Seller's Perspective): Costs incurred in generating the raw data and creating BRUs can be identified and measured, allowing the BRU to be initially recognised as inventory by the project proponent.

● CDRC Creation as Data Product: The encapsulation of BRUs into a CDRC transforms the underlying data into a structured, tradeable data product.

● Asset Recognition Trigger: For the buyer (or upon a qualifying sale by the seller), the CDRC represents an asset only when the following conditions from China's "Interim Provisions on Accounting Treatment of Enterprise Data Resources" are met:

● Control – obtained through the transfer of the CDRC, establishing clear ownership.

● Probable Economic Inflows – the CDRC is acquired with the intention to use it for carbon compliance, strategic goals, or resale, from which future economic benefits are expected.

● Reliable Measurement – the transaction price or cost of the CDRC can be reliably measured.

● Once these conditions are satisfied, the CDRC (and the BRUs embedded within it) can be recognised on the balance sheet as a data asset (e.g., as inventory or an intangible asset) for the relevant entity. The act of a voluntary cancellation for a carbon neutrality claim is a key economic event that confirms the realisation of the asset's economic benefit.

The Role of the Carbon Data Rights Certificate (CDRC)

The CDRC is not merely a certificate of rights; it is a structured data product carrier built upon one or more BRUs. Its primary functions are:

● Encapsulation and Organisation: A single CDRC can represent a variable volume of carbon abatement (e.g., a CDRC with a face value of 10 encapsulates 10 BRUs). This allows for flexible data configuration for different application scenarios (e.g., ESG reporting, voluntary carbon markets, auctions).

● Lifecycle Management: The CDRC enables full-chain traceability from generation and holding to trading and final cancellation (e.g., for a carbon neutrality claim). This makes the CDRC the central unit for managing the data product's application status.

● Bridging Data and Accounting: The CDRC serves as the vehicle through which the economic value of the underlying carbon abatement data is realised. It is at the CDRC level that the transformation from a data product to a recognised data asset on a balance sheet is triggered upon the occurrence of an economic event (e.g., a qualifying sale or usage).

Tax treatment of BRUs

You should obtain your own professional advice about the tax treatment of BRUs having regard to your own situation. Generally, the following applies to BRUs:

● the proceeds of selling an CDRCs are assessable income on revenue account in the income year the BRU is sold

● sellers of CDRCs are deemed to have received market value for an BRUs in certain circumstances (for example, transactions between related entities).

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