Skip to main content

(b) Article III: Sale and Purchase of CDR credits

Supplier will sell, and Buyer will purchase, the Credits specified in Exhibit B (the "Contract Credits"). Credits will be used for voluntary purposes only and will not be claimed toward any national emission targets. Supplier will not sell or otherwise encumber any Contract Credits or other environmental attributes associated with the same removals. Double-counting of Credits is strictly prohibited. Supplier undertakes to deliver CDR credits (either by transfer into the buyer's registry account or retirement on the buyer's behalf). Supplier promises exclusivity regarding the contracted CDR credits: No double-selling and no double-counting. The buyer agrees not to use credits in ways that would interfere with national climate accounting under the Paris Agreement.

Comments​

  • For buyers: Ensures that CDR credits represent genuine, unique removals. Ownership cannot be diluted by competing claims.
  • For suppliers: Establishes boundaries around how CDR credits can be used, avoiding conflicts with host country's obligations.
  • Broader market integrity: Double-counting is one of the main reputational risks in voluntary carbon markets, and this clause addresses aspects related to double-counting.

Registries and Double-Counting​

Registries are the record-keepers of the CDR market. They issue CDR credits, track transfers, and record retirements. Without trusted registries, the risk of double issuance or double counting would undermine market confidence.

Offtake Agreements typically specify the registry in which CDR credits will be issued. They may provide fallback options if that registry ceases operations or changes its rules (OSCAR omits these potential details). Offtake Agreements often require that CDR credits carry unique serial numbers and that ownership transfers are recorded in real time.

Double-counting can occur in three ways:

  • Double issuance: Two CDR credits are issued for the same ton of CO₂ removed.
  • Double claiming: Two entities claim the same CDR credit toward their targets.
  • Double use: A CDR credit is retired once but used to justify multiple claims.

Parties, and the broader CDR community, may not always agree on whether a particular situation constitutes double counting. To guard against these risks, Offtake Agreements often mandate that CDR credits be retired promptly upon use, that transfers be documented with registry receipts, and that international transfers be accompanied by corresponding adjustments under Article 6 of the Paris Agreement.

Delivery Terms​

One of the defining features of an Offtake Agreement is its treatment of delivery. Unlike many traditional commodities, CDR credits do not exist at the outset of a contract; they are generated only after a project performs, monitoring is completed, and a registry issues a serialized CDR credit. This forward-looking nature makes delivery terms central to OSCAR.

Offtake Agreements typically establish a delivery schedule that sets out the cadence and volume of CDR credits expected over the life of the contract. Schedules may be annual (as in OSCAR), quarterly, or even monthly, depending on the maturity of the project and the needs of the buyer. The schedule functions both as a commercial commitment and as a performance benchmark against which remedies are applied.

Delivery terms also define the point at which risk transfers. Is delivery deemed to occur when the supplier causes CDR credits to be issued into its account at the registry? Or only when the supplier receives payment from the buyer, or when those CDR credits are transferred to the buyer's account? Does entitlement to the CDR credits or the environmental attributes they represent transfer between the parties at the same time as the CDR credits are transferred or retired in the registry? The answers have consequences for ownership, liability, and insurance coverage. For instance, if CDR credits are deemed delivered upon issuance, the supplier is responsible only until that moment; if delivery occurs upon transfer, the supplier may remain liable for delays or technical errors at the registry stage.

Because many projects face uncertainty in ramp-up, Offtake Agreements often allow for a "ramp period" in which delivery quantities are lower and gradually increase. This structure mirrors practices from renewable energy, where commissioning and testing periods are recognized as less predictable. Similarly, Offtake Agreements sometimes provide for "make-up rights," allowing suppliers to deliver shortfalls in subsequent periods. Such provisions must balance flexibility for suppliers with predictability for buyers, especially if buyers need CDR credits for annual reporting cycles.