Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
For forest sequestration projects, a portion of ARB offset credits issued to
the forest offset project will be placed by ARB into the Forest Buffer Account.
(1) The amount of ARB offset credits that
must be placed in the Forest Buffer Account shall be determined as set forth in
the applicable version of the Compliance Offset Protocol in section
95973(a)(2)(C)4.
(2) ARB offset credits will be transferred to
the Forest Buffer Account by ARB at the time of ARB offset credit registration
pursuant to section
95982.
(3) If a forest offset project is originally
submitted through an Offset Project Registry an equal number of registry offset
credits must be removed or cancelled by the Offset Project Registry, such that
the registry offset credit is no longer available for transaction on the Offset
Project Registry system, and issued by ARB for placement in the Forest Buffer
Account.
(4) The ARB offset credits
placed into the Forest Buffer Account must correspond to the Reporting Period
for which the ARB offset credits are issued.
(b) Unintentional Reversals. If there has
been an unintentional reversal, the Offset Project Operator or Authorized
Project Designee must notify ARB and the Offset Project Registry, in writing,
of the reversal and provide an explanation for the nature of the unintentional
reversal within 30 calendar days of its discovery.
(1) In the case of an unintentional reversal
the Offset Project Operator or Authorized Project Designee shall provide in
writing to ARB and an Offset Project Registry, if applicable, a completed
verified estimate of current carbon stocks within the offset project boundary
within 23 months of the discovery of the unintentional reversal. To determine
the verified estimate of current carbon stocks a full offset verification must
be conducted pursuant to sections
95977 through
95978, including a site visit. The
verified estimate may be submitted as a separate offset verification services,
or incorporated into a chapter of the detailed verification report submitted
pursuant to section
95977.1 when offset verification
services are conducted for an Offset Project Data Report. After an
unintentional reversal, the Offset Project Operator or Authorized Project
Designee does not need to submit an Offset Project Data Report until the
required verified estimate of current carbon stocks within the offset project
boundary is completed.
(2) If ARB
determines that there has been an unintentional reversal, and ARB offset
credits have been issued to the offset project, ARB will retire a quantity of
ARB offset credits from the Forest Buffer Account according to section
95983(b)(2)(A) or
(B), as applicable.
(A) If the forest project came into the
program directly under a Compliance Offset Protocol and did not transition from
an Early Action Offset Program, ARB will retire ARB offset credits in the
amount of metric tons CO2e reversed for all Reporting
Periods.
(B) If the forest project
transitioned into the program originally from an Early Action Offset Program,
ARB will retire ARB offset credits from the Forest Buffer Account according to
the following equation, calculated for all Reporting Periods, rounded up to the
nearest whole metric ton CO2e:
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here to view image
Where:
"ARBRetire" is the number of ARB
offset credits that must be retired from the ARB Forest Buffer Account to
compensate for the unintentional reversal for all Reporting Periods;
"ARBCredits" is the total number
of ARB offset credits issued to the forest project for all Reporting Periods,
including any ARB offset credits that were issued for early action and any that
were placed into the Forest Buffer Account for all Reporting Periods;
"EAOPCredits" is the total
number of early action offset credits issued to the forest project by the Early
Action Offset Program for all Reporting Periods, including any voluntary offset
credits placed into the Early Action Offset Program's buffer account for forest
projects that were not transferred to ARB's Forest Buffer Account, but
excluding any early action offset credits that were issued ARB offset credits;
and
"Reversal" is the total metric tons of
CO2e reversed for all Reporting
Periods.
(c) Intentional Reversals. Requirements for
intentional reversals are as follows:
(1) If
an intentional reversal occurs, the Offset Project Operator or Authorized
Project Designee shall, within 30 calendar days of the intentional reversal:
(A) If the forest project came into the
program directly under a Compliance Offset Protocol and did not transition from
an Early Action Offset Program, the forest owner must turn in valid compliance
instruments in the amount of metric tons CO2e reversed for all Reporting
Periods.
(B) Provide a written
description and explanation of the intentional reversal to ARB and the Offset
Project Registry, if applicable.
(2) Within one year of the occurrence of an
intentional reversal, the Offset Project Operator or Authorized Project
Designee shall submit to ARB and the Offset Project Registry, if applicable, a
completed verified estimate of current carbon stocks within the offset project
boundary. To determine the verified estimate of current carbon stocks a full
offset verification must be conducted pursuant to sections
95977 through
95978, including a site visit. The
verified estimate may be submitted as a separate offset verification services,
or incorporated into a chapter of the detailed verification report submitted
pursuant to section
95977.1 when offset verification
services are conducted for an Offset Project Data Report.
(3) If an intentional reversal occurs from a
forest offset project, and ARB offset credits have been issued to the offset
project, the current or most recent (in the case of an offset project after the
final crediting period), forest owner(s) must submit to ARB for placement in
the Retirement Account a quantity of valid ARB offset credits or other approved
compliance instruments pursuant to subarticle 4 within six months of
notification by ARB in the amount determined pursuant to sections
95983(c)(3)(A) or
(B), as applicable:
(A) If the forest project came into the
program directly under a Compliance Offset Protocol and did not transition from
an Early Action Offset Program, the forest owner must turn in valid compliance
instruments in the amount of metric tons CO2e reversed
for all Reporting Periods.
(B) If
the forest project transitioned into the program originally from an Early
Action Offset Program, the forest owner must turn in valid compliance
instruments according to the following equation, calculated for all Reporting
Periods, rounded up to the nearest metric ton CO2e:
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here to view image
Where:
"FOReplace" is the number of
valid compliance instruments that the forest owner must turn in to compensate
for the intentional reversal for all Reporting Periods;
"ARBCredits" is the total number
of ARB offset credits issued to the forest project for all Reporting Periods,
including any ARB offset credits that were issued for early action and any that
were placed into the Forest Buffer Account for all Reporting Periods;
"EAOPCredits" is the total
number of early action offset credits issued to the forest project by the Early
Action Offset Program for all Reporting Periods, including any voluntary offset
credits placed into the Early Action Offset Program's buffer account for forest
projects that were not transferred to ARB's Forest Buffer Account, but
excluding any early action offset credits that were issued ARB offset credits;
and
"Reversal" is the total metric tons of
CO2e reversed for all Reporting
Periods.
(C) Notification by
ARB will occur after the verified estimate of carbon stocks referred to in
section 95983(c)(2) has
been submitted to ARB, or after one year has elapsed since the occurrence of
the reversal if the Offset Project Operator or Authorized Project Designee
fails to submit the verified estimate of carbon stocks.
(D) If the forest owner does not submit valid
ARB offset credits or other approved compliance instruments in the amount
required pursuant to sections
95983(c)(3)(A) or
(B) to ARB within six months of notification
by ARB, ARB will retire a quantity of ARB offset credits equal to the
difference between the number of metric tons of CO2e
determined pursuant to sections
95983(c)(3)(A) or
(B) and the number of retired approved
compliance instruments from the Forest Buffer Account and the forest owner will
be subject to enforcement action and each ARB offset credit retired from the
Forest Buffer Account will constitute a separate violation pursuant to section
96014.
(4) Early Project Terminations. If a project
termination, as defined in the Compliance Offset Protocol in section
95973(a)(2)(C)
(4.), occurs from a compliance or early action forest offset project, and ARB
offset credits have been issued to the offset project, the current or most
recent (in the case of an offset project after the final crediting period),
forest owner(s) must submit to ARB for placement in the Retirement Account a
quantity of valid ARB offset credits or other approved compliance instruments
pursuant to subarticle 4 in the amount equal to the number of ARB offset
credits issued to the offset project for each Reporting Period, except for
improved forest management forest offset projects. If the project is an
improved forest management forest offset project, the amount of metric tons
CO2e reversed must be multiplied by the compensation
rate in the Compliance Offset Protocol in section
95973(a)(2)(C)4.
(A) ARB will notify the forest owner of how
many ARB offset credits must be replaced with valid compliance
instruments.
(B) The forest owner
must submit to ARB for placement in the Retirement Account a valid ARB offset
credit or another approved compliance instrument pursuant to subarticle 4 for
each ARB offset credit required to be replaced within six months of ARB's
retirement.
(C) If the forest owner
does not submit valid ARB offset credits or other approved compliance
instruments to ARB in the amount required pursuant to section
95983(c)(4)
within six months of ARB's retirement, ARB will retire a quantity of ARB offset
credits equal to the difference between the number of metric tons of
CO2e determined pursuant to section
95983(c)(4) and
the number of retired approved compliance instruments from the Forest Buffer
Account and they will be subject to enforcement action and each ARB offset
credit retired from the Forest Buffer Account will constitute a separate
violation pursuant to section
96014.
(d) Disposition of Forest Sequestration
Projects After a Reversal. If a reversal lowers the forest offset project's
actual standing live carbon stocks below its project baseline standing live
carbon stocks, the forest offset project will be terminated by ARB or an Offset
Project Registry.
(1) If the forest offset
project is terminated due to an unintentional reversal, ARB will retire from
the Forest Buffer Account a quantity of ARB offset credits equal to the total
number of ARB offset credits issued pursuant to section
95981, and where applicable, all
ARB offset credits issued to the offset project pursuant to the Program for
Recognition of Early Action Offset Credits, over the preceding 100
years.
(2) If the forest offset
project is terminated due to an unintentional reversal, another offset project
may be initiated and submitted to ARB or an Offset Project Registry for listing
within the same offset project boundary.
(3) If the forest offset project has
experienced an unintentional reversal and its actual standing live carbon
stocks are still above the approved baseline levels, it may continue without
termination as long as the unintentional reversal has been compensated by the
Forest Buffer Account. The Offset Project Operator or Authorized Project
Designee must continue contributing to the Forest Buffer Account in future
years as quantified in section
95983(a)(1).
(4) If the forest offset project is
terminated due to any reason except an unintentional reversal, new offset
projects may not be initiated within the same offset project boundary, unless
otherwise specified in a Compliance Offset Protocol.
(e) Change of Forest Owner or Offset Project
Operator. When a Forest Owner or Offset Project Operator changes, whether by
merger, acquisition, or any other means, the successor Forest Owner or Offset
Project Operator, after the change in ownership, as applicable, is expressly
liable for all obligations of the predecessor Forest Owner or Offset Project
Operator to submit compliance instruments as determined pursuant to sections
95983(c)(3). For
the avoidance of doubt, this obligation of the successor Forest Owner or Offset
Project Operator, as applicable, consists of the difference between the number
of metric tons of CO2e determined pursuant to sections
95983(c)(3) and
the number of valid ARB offset credits or other approved compliance instruments
submitted by the predecessor forest owner pursuant to sections
95983(c)(3).
1. New
section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code
section
11343.4
(Register 2011, No. 50).
2. Amendment filed 6-26-2014; operative
7-1-2014 pursuant to Government Code section
11343.4(b)(3)
(Register 2014, No. 26).
3. Amendment of subsection (a)(1) filed
12-31-2014; operative 1-1-2015 pursuant to Government Code section
11343.4(b)(3)
(Register 2015, No. 1).
4. Amendment filed 9-18-2017; operative
10-1-2017 pursuant to Government Code section
11343.4(b)(3)
(Register 2017, No. 38).
5. New subsection (e) filed 3-29-2019;
operative 3-29-2019 pursuant to Government Code section
11343.4(b)(3)
(Register 2019, No. 13).
Note: Authority cited: Sections
38510,
38560,
38562,
38570,
38571,
38580,
39600
and
39601,
Health and Safety Code. Reference: Sections
38530,
38560.5,
38564,
38565,
38570
and
39600,
Health and Safety Code.
