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(e) Article VI: Monitoring, Reporting, and Verification (MRV)

Supplier will maintain and implement an MRV Plan in accordance with the Carbon Standard and prudent industry practices. Supplier will obtain validation and verification by accredited verifiers and maintain all approvals and permits necessary for the Project. Beginning on the Effective Date, Supplier will provide quarterly progress reports to Buyer summarizing (a) Project development, (b) verification status, (c) anticipated Delivery schedule, and (d) any material risks or delays. Buyer may, upon reasonable notice, request supporting documentation or visit the Project site no more than once per year during normal business hours.

In the voluntary carbon market (VCM), a hierarchy of accreditation has emerged. At its base level, the International Carbon Reduction and Offset Alliance (ICROA) provides a "floor" of acceptability. Above that, only a very limited number of standards and methodologies have been accredited by the Integrity Council for the Voluntary Carbon Market (IC-VCM), and this exclusivity is likely to persist. The framework created by the UNFCCC, together with the PACM and regional instruments like the EU CRCF, means that buyers are now faced with a more complex decision-making environment. They must assess the risks of a given CDR credit by looking not only at its features and origin, but also at the legal or policy requirements that govern its proposed use, whether for compliance, compensation, or reputational purposes.

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MRV obligations are the backbone of credit integrity. They ensure transparency and allow Buyer oversight without micromanaging the Project. Reporting builds trust, while defined audit rights maintain accountability and help Buyers meet due diligence obligations under their own climate commitments.

Carbon markets depend on credibility. Article VI of OSCAR ensures that the project is monitored, and the relevant CDR credits are measured, reported, and verified by independent experts. Audit rights give buyers transparency and confidence - a feature increasingly demanded by corporate ESG teams and auditors.

The MRV Framework​

The credibility of CDR hinges on the robustness of its MRV systems. Unlike conventional goods, carbon removals are invisible and intangible; they exist as quantified claims about atmospheric CO₂ flows. MRV is the infrastructure that transforms these claims into trusted CDR credits.

Monitoring refers to the continuous or periodic collection of data on project performance. For direct air capture, this may involve flow meters and energy consumption logs. For soil carbon projects, it might involve remote sensing, field sampling, and modeling.

Measurement involves quantifying net removals, often with reference to baselines and counterfactual scenarios. For example, in a biochar project, measurement requires accounting for the carbon content of the feedstock, the efficiency of pyrolysis, and the emissions associated with transportation.

Reporting encompasses the structured presentation of data and calculations in accordance with registry or protocol requirements. Reports must be transparent, replicable, and auditable.

Verification is the independent review of reported data by an accredited third party. Verifiers test the accuracy of data, assess the appropriateness of methodologies, and confirm that uncertainties are treated conservatively.

Offtake Agreements frequently specify the principles that MRV must meet: accuracy, transparency, comparability, independence, conservativeness, and continuous improvement. Many also reference external standards, such as ISO 14064 or the Intergovernmental Panel on Climate Change (IPCC) guidelines, to ensure alignment with international best practice.

Protocols and Methodologies​

Every Offtake Agreement must identify the protocol under which CDR credits will be generated. Methodologies define project boundaries, establish baselines, prescribe measurement approaches, and set rules for dealing with uncertainty, leakage, and permanence.

A robust protocol will:

  • Define scope and boundaries to determine which carbon pools and emissions sources are included, and what geographic and temporal boundaries apply.
  • Set baseline conditions to determine what emissions would have occurred in the absence of the project.
  • Specify measurement techniques to identify direct measurements, modeled estimates, or remote sensing methods.
  • Establish data quality standards to define thresholds for precision, sampling frequency, and calibration.
  • Prescribe reporting formats to ensure comparability and transparency.
  • Outline verification requirements to define frequency of audits, qualifications of verifiers, and conflict-of-interest safeguards.
  • Address leakage and reversals with requirements for monitoring, buffer contributions, or insurance.
  • Provide update pathways to incorporate new science and best practices over time.

By aligning with methodologies endorsed by respected registries and international initiatives (e.g., IC-VCM Core Carbon Principles), Offtake Agreements enhance the credibility and fungibility of CDR credits.

Hierarchy of Accreditation​

Within the voluntary carbon market (VCM), accreditation operates through multiple layers, creating a complex hierarchy that buyers must navigate. At the most basic level, membership in or accreditation by the International Carbon Reduction and Offset Alliance (ICROA) sets a recognized "floor" of quality, ensuring that standards meet minimum criteria for transparency and integrity. However, only a limited number of standards and methodologies have advanced to achieve endorsement by the Integrity Council for the Voluntary Carbon Market (IC-VCM). This results in a tiered structure in which not all ICROA-recognized standards automatically qualify for IC-VCM recognition. Buyers are therefore required to conduct layered due diligence, evaluating whether CDR credits meet baseline ICROA standards and, in addition, whether they carry the higher-level endorsement of the IC-VCM.

Interaction with Compliance Frameworks​

The VCM does not exist in isolation; it increasingly overlaps with compliance and quasi-compliance regimes at the international, national, and subnational levels. Frameworks such as the UNFCCC's Paris Agreement Crediting Mechanism (PACM), the forthcoming EU Carbon Removal Certification Framework (CRCF), and national standards developed in jurisdictions such as Japan and Singapore are expected to coexist with voluntary standards. For buyers, this convergence raises critical strategic questions: Will CDR credits acquired in the VCM also be accepted for corporate compensation claims, insetting within supply chains, or even regulatory compliance under emerging national or regional regimes? Careful evaluation of the interoperability between voluntary and compliance frameworks is thus a central due diligence task.

Risk Assessment Lens​

From a risk management perspective, buyers should adopt a multidimensional lens when assessing the quality and suitability of CDR credits. Key considerations include:

Type and features of the CDR credit. This involves evaluating the durability and permanence of storage, as well as the robustness of monitoring, reporting, and verification (MRV) systems underpinning the CDR credit.

Origin of the CDR credit. Buyers must understand the host country's rules, whether Article 6 authorizations have been issued, and the degree to which there is a risk of double-counting where the same reduction or removal is claimed by more than one entity.

Proposed use of the CDR credit. The intended application, whether for voluntary corporate claims, insetting within a supply chain, or compliance with regulatory obligations, directly influences the risk profile and determines the level of scrutiny required.

Drafting Implications​

These accreditation and risk considerations translate directly into contractual obligations. Offtake Agreements may need to include specific representations by the supplier regarding the MRV protocol employed, warranties that the CDR credits comply with or are recognized under specified standards, and assurances relating to host-country authorization or Article 6 alignment where relevant. At the same time, drafting should remain balanced: suppliers, particularly early-stage project developers, cannot realistically provide absolute assurances on evolving regulatory acceptance. Offtake Agreements must therefore allocate risks in a manner that is both commercially reasonable and reflective of market realities, combining buyer protections with supplier feasibility.