An online event held by CDR30 marked the launch of the Open Standard Carbon Removal Purchase Agreement (OSCAR)—a standardized legal contract template that aims to streamline carbon dioxide removal (CDR) transactions.
Envisioned to be used as a framework that will reduce the transaction times, cost, and risk around CDR contracts, OSCAR is expected to ease the market entrance for new buyers.
The standardized contract was put together by CDR industry veterans, who collaborated with market stakeholders and legal practitioners over a period of one year.
The resulting OSCAR contract form is hosted on the CDR.fyi platform, providing a trustworthy stand-alone agreement template or a solid starting point for parties interested in structuring more complex durable carbon-removal deals.
OSCAR was created to reduce the CDR agreement negotiation time, aligning expectations on both the buyer and supplier side in regard to risk accountability and ensuring the bankability of contracts for early-stage CDR suppliers.
This template addresses the lack of standardization within the CDR space, transforming a conventionally costly and time-consuming process of negotiating bespoke legal drafts into a contract model that has the potential to advance the market from pilot-stage to repeatable, investable transactions.
Specifically, the OSCAR template defines a range of key details around CDR transactions, including credit specifications, delivery and MRV obligations, pricing and payment terms, and the allocation of performance, delay, shortfalls, quality, and change-in-law risks.
The standardized contract is published in three parts: CDR-specific commercial terms, boilerplate provisions, and a schedule with definitions. It also comes with a guidebook that provides clause-by-clause details and guidance on practical implementation.
Relevant: Carbon Drawdown Initiative Launches New Platform For Streamlined CDR Purchases
This resource is published openly and will be maintained as a living document that will be refined in alignment with community feedback and market use.
In the coming months, the working group behind the OSCAR template will engage with buyers, suppliers, legal practitioners, and financial institutions to test and optimize this resource, which is the first of several open-source tools created to support market development and establish communities of practice around specialist domains.
Read more: Users Can Now Explore The Market Through An Upgraded CDR.fyi Portal
