The Climate Action Reserve has taken a step toward establishing an insurance-based route for carbon credits seeking eligibility under the international aviation sector’s carbon offset program, CORSIA, while tightening safeguards against double claiming.
Los Angeles-based carbon registry said last week it has published criteria governing approved insurance mechanisms for Climate Reserve Tonnes (CRTs) issued from 2021 onward.
The framework was developed with global insurance intermediary Howden and sets requirements for project developers using insurance to meet compensation obligations associated with credits used under the CORSIA scheme.
Insurance Could Bridge Gaps In Host Country Authorization
The mechanism is intended for situations in which a host country has not authorized a corresponding adjustment, withdraws or modifies that authorization, or when the Reserve cannot confirm that the adjustment has been applied. A corresponding adjustment is designed to prevent the same emissions reduction from being claimed more than once.
The insurance pathway would allow project developers and buyers to pursue CORSIA eligibility before a host country publishes its Biennial Transparency Report, while providing protection against double claiming.
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The Reserve has also revised its credit-labeling system to reflect the new pathway. A CRT can first receive an ‘Article 6 Authorized’ designation after a host country issues a Letter of Authorization committing to apply the corresponding adjustment. That designation is required before a credit can receive the ‘CORSIA Eligible-Authorized’ label.
To obtain the latter designation, developers must submit an approved insurance mechanism, a Deed of Undertaking and a formal request to the carbon registry.
The Reserve said two remaining pieces are still being completed: a list of insurance products that meet its requirements and a CORSIA Deed of Undertaking for developers. Both are expected to be released in the coming weeks.
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