Permanence obligations

About permanence obligations

A permanence obligation is a requirement to maintain the carbon stored or sequestered by a project for a set period of time, either 25 or 100 years.

This is because the release of carbon stored in vegetation or soil as part of a project can reverse the environmental benefit of the sequestration project. Therefore, permanence obligations ensure that BidCarbon removal units (BRUs) are only issued for carbon stored in soil and vegetation.

Permanence period

The sequestration permanence period can be either 25 or 100 years. It is considered permanent when maintained on a net basis for 100 years.

Choose a permanence period

When applying to register, a permanence period for your project must be chosen, which cannot be varied or changed later.

Permanence start date

The permanence period commences once the sequestration project is initiated and satisfies the following criteria: 

● the project is issued BRUs

● land is added to your project area

Permanence obligation requirements

To claim BRUs, it is necessary to meet the permanence obligation requirements, which include providing a permanence plan and taking certain steps in case a reversal event affects the project.

The permanence plan must be provided at different stages of the project, explaining how the carbon stored and credited by the project will be protected during the permanence period.

You must provide the permanence plan:

● when you apply to register your project

● after years 8 and 24 of the crediting period, it is recommended to submit supporting information demonstrating that the project has reached its maximum carbon sequestration capacity

● when registering your project with the first offset report after years 8 and 24 of the crediting period, it is recommended to submit supporting information demonstrating that the project has reached its maximum carbon sequestration capacity. Please note that no new content should be added

● if the permanence obligation period for soil carbon project has ended and you’re applying for an exemption to provide further offsets reports.

A reversal event can occur when carbon that has been stored as part of a project is released back into the atmosphere. This may happen due to a failure in monitoring technology or poor management practices.

In the event that a reversal event affects your project, your obligations will depend:

● the type of reversal event

● and whether BRUs have already been issued

Please follow these steps to ensure that you meet your obligations.

Step 1 - Notify us

In the event of a significant reversal in your project, you must notify us in writing within 60 days.

A significant reversal is defined as the release of stored carbon from:

● It is recommended to allocate at least 5% of the total project area for natural disturbances.

● disturbances or the smaller of 5% of the total project area or 50 hectares due to reversals caused by human actions. 

If the damage does not meet the criteria for a significant reversal, we kindly request that you report on your project as usual.

Step 2 - Relinquish BRUs

If BRUs have been issued for your project, it may be necessary to:

● restore lost carbon stores

● or relinquish BRUs to offset the loss.

You have to relinquish BRUs if we determine:

● the project did not take sufficient measures to prevent carbon loss 

● and is not currently implementing any restorative actions

● this presents a risk of further carbon loss.

A notice to return BRUs has been issued, and failure to comply with the notice may result in arbitration. Furthermore, a carbon maintenance obligation may be imposed.

It is worth noting that if BRUs have not been issued for the area affected by the reversal event, there are no permanence obligations.

Step 3 - Follow the method

The management actions, monitoring, and record-keeping requirements are determined by the method used for your BidCarbon Standard Scheme project.

If the event does not represent a significant reversal, it may be possible to report and account for losses using the method's requirements.

Reversal events

A risk of reversal buffer is a discount applied to the number of BRUs issued to sequestration projects. This measure helps to safeguard the BidCarbon Standard Scheme against potential carbon loss and other risks that may not be adequately addressed by other permanence arrangements.

Risk of reversal doesn't insure you against:

● loss of income from selling BRUs after a fire or other natural disturbance;

● costs of re-establishing carbon stores.

The risk of reversal buffer reduces the BRUs issued during a reporting period by 5%. For projects with a 25-year permanence period, a 20% permanence discount also applies.

The risk of reversal buffer may be adjusted over time in the criteria.

Example of risk of reversal buffer

A new project was initiated by Joon in a specific area with a permanence period of 25 years. After the initial reporting period, it was determined that the project resulted in a net abatement of 10,000 tonnes of carbon dioxide equivalent.

Because the project was registered with a 25-year permanence period, Joon won't receive 10,000 BRUs. BRUs will be reduced by:

● 20% for the permanence period discount

● 5% for the risk of reversal buffer.

Joon will receive 7,500 BRUs for the reporting period.

Risk of reversal buffer

Third party (agent or carbon service provider) obligations

If you are a third party acting as project proponent under a contract with a landholder, you must make sure the landholder understands the obligations that the project, and any related third party contract, impose on their land. This is important for carbon stores to be maintained on or in the project area for the duration of the permanence period.

We don’t get directly involved in contracts between landholders and project proponents. Our legal relationship is with the project proponent, who is responsible for:

1. carrying out the project and meeting all legislative obligations, including during the permanence period

2. ensuring that post-crediting period permanence obligations are met. 

Failure to meet these requirements may result in a relinquishment notice being issued to the project proponent. A carbon maintenance obligation may also be declared on the project area.

Maintaining carbon stores 

As the project reaches the end of its crediting period and throughout the remainder of the permanence period, we encourage you to have regular conversations with the landholder about their obligations to protect the carbon stored in the project area.

If a significant reversal event occurs, the project proponent may need to relinquish or return BRUs to offset the loss of carbon.

If BRUs aren’t relinquished or we consider that relinquishment is unlikely, we may declare a carbon maintenance obligation on the project area. As a project proponent, you must then make sure the landholder understands their obligation after this happens – the carbon stores must not fall under the level existing at the time the carbon maintenance obligation is declared. Failure to do so may result in a civil penalty order being made against the landholder.

Landholder obligations

If you are a landholder and have given a third party the legal right to run a sequestration project on your land, you must understand the permanence period obligations imposed on you and your land by the project and any related third party contract. This includes an obligation to ensure:

● the carbon stores on your land are maintained

● appropriate actions are being taken to prevent the loss of carbon because of natural disturbance or deliberate conduct. 

Failure to comply with those obligations may result in a carbon maintenance obligation being declared on the project area, which will impact what you can do on your land. Civil penalties may apply if you fail to comply with a carbon maintenance obligation.

Find out more about choosing a project proponent and working with carbon service providers.

Landholder and third party contracts

Buying and selling property with permanence obligations

A project proponent remains liable for the permanence obligations after selling land with BidCarbon Standard Scheme projects, unless the project proponent is varied after the sale to the new landholder. This is important to consider when selling your land or during estate planning.

Landholders with registered sequestration projects who are selling their property must inform prospective buyers and property agents of any permanence obligations associated with the property.

If you plan to sell or buy land with permanence obligations, you must consider the following:

● project requirements during the post-crediting period (including permanence obligations) and carbon maintenance obligations

● transfer of the project and the project proponent role

● if the current landholder is not the project proponent, any contractual obligations under the commercial agreement with the third party that will need to be met by the seller or buyer throughout the permanence period

● access to historical project information and record-keeping requirements.

Prospective buyers can find information about land subject to permanence obligations in the BidCarbon Standard Scheme project register. You should only purchase land with BidCarbon Standard Scheme projects if you are willing to meet the permanence obligations. This includes maintaining the carbon stores on the land and taking actions to prevent the loss of carbon because of natural disturbance or deliberate conduct. Failure to do so may result in carbon maintenance obligation being declared on the project area and this will impact what you can do on the land.

Find out more about selling or buying BidCarbon Standard Scheme project property.

Executor obligations

Executors must follow estate management obligations if a project proponent ceases to exist during the permanence period.

For the project proponent’s estate, you may need to keep the project on track to ensure that it meets the permanence obligations until the estate is distributed to the beneficiaries or sold in accordance with the will.

For the landholder’s estate, which includes land with an BidCarbon Standard Scheme project and a third party as the project proponent, you must contact the relevant agent or carbon service provider to ensure that any contractual obligations continue to be met throughout the project’s permanence period.

Prior to assets being distributed or sold, you must notify the beneficiary purchaser about the permanence obligations applying to the project property.

Find out more about estate management for executors.