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Frequently Asked Questions

This page provides answers to questions frequently asked about the VCS Program. Further information is also available in the VCS Program Documents. Capitalized words have specific definitions under the VCS Program (see VCS 2007.1 and the guidance document VCS Project Registration and VCU Issuance Process).

ROLE OF THE VCS ASSOCIATION
1. What is the role of the VCS Association?
2. Does the VCSA review individual projects?
ADDITIONALITY
METHODOLOGIES
PROJECT START DATE AND PROJECT CREDITING PERIOD
PROJECT DESCRIPTION, VALIDATION AND VERIFICATION
VCS REGISTRIES, PROJECT DATABASE AND PROJECT REGISTRATION
INTERACTION WITH OTHER GHG PROGRAMS
1. Are GHG emission reductions or removals generated by CDM projects prior to CDM registration eligible under the VCS Program?
2. Can CRTs issued under the CCAR program be converted into VCUs?
AGRICULTURE, FORESTRY AND OTHER LAND USE PROJECTS

1. Role of the VCS Association

What is the role of the VCS Association?
The VCS Association (VCSA) manages the VCS Program, which in turn sets the standard for GHG emission reduction or removal projects under the VCS. The VCS Program undertakes a variety of activities, including, but not limited to, the accreditation rules for Validators and Verifiers operating under the VCS, the approval process for recognition of other GHG Programs, supervision of the VCS Project Database, and the conditions for approval of VCS Registries.

Does the VCSA review individual projects?
The VCSA does not review projects before they are approved (as is the case in the CDM, JI and Gold Standard). Instead, this work is undertaken by VCS-approved Validators and Verifiers, and their work is checked for completeness by approved VCS Registries when Project Proponents submit projects for registration and/or request issuance of VCUs. As such, the VCSA does not have a direct role in any part of the project registration process, which creates an efficient process that can be completed without the involvement of the VCSA. To further ensure the integrity of the VCS Program, the VCSA undertakes periodic reviews to evaluate whether the VCS Program has been implemented in accordance with its objectives.

2. Additionality

What are the additionality requirements for VCS projects?
All projects approved under the VCS must be additional, and the additionality requirements are those set out in the methodology that the project uses (e.g., the CDM Tool for demonstration and assessment of additionality or another tool). Project Proponents proposing new methodologies can use the VCS additionality guidance given in Section 5.8 of the VCS 2007.1 document to define new approaches for the demonstration of additionality, either within the methodology or as a separate tool (both of which are subject to the VCS Double Approval Process). However, projects using existing methodologies are required to follow the additionality requirements set out in the methodology they are using. As such, the VCS additionality guidance is not a substitute for the additionality requirements set out in the methodology being used.

What additionality test should be applied when using a CDM methodology?
If the project uses a CDM methodology, it must adhere to the specifications of the methodology which may, for example, require use of the Tool for demonstration and assessment of additionality or the Combined tool to identify the baseline scenario and demonstration of additionality. If the Project Proponent wants instead to use an alternative approved additionality tool (e.g., a tool approved by under the VCS Program or CDM), it must document this as a Methodology Revision and have the Methodology Revision approved under the VCS Double Approval Process. Likewise, if the Project Proponent wants to propose directly in the methodology an alternative approach for the demonstration of additionality based on the VCS additionality guidance outlined in Section 5.8 of the VCS 2007.1 document, it must document this as a Methodology Revision and have the Methodology Revision approved under the VCS Double Approval Process.

Do projects need to demonstrate early consideration of carbon finance in line with Annex 46 of EB 41?
Additionality is a key tenet of the VCS and the requirement that projects must be validated within two years of the project start date (noting the deadline extension granted in the VCSA policy announcement of 10 September 2008) ensures that only projects that intended to pursue carbon finance from the outset are eligible. Given this requirement, projects are not required to demonstrate prior consideration of carbon finance in line with Annex 46 of CDM Executive Board meeting 41, which requires project participants to inform a Host Party DNA and/or the UNFCCC secretariat in writing of the commencement of the project activity and of their intention to seek CDM status. However, validators will apply their professional judgment when validating projects and are entitled to request that projects demonstrate early consideration of carbon finance when they deem this appropriate.

Can a project rejected by the CDM on grounds of additionality be registered under the VCS?
Projects that have been rejected by the CDM Executive Board other than due to procedural or eligibility requirements cannot be registered under the VCS. Section 5.2.2 of the VCS 2007.1 contains the following:

Projects rejected by other GHG Programs, due to procedural or eligibility requirements where the GHG Program applied has been approved by the VCS Board, can be considered for VCUs but project proponents for such a project shall:

clearly state in its VCS PD all GHG Programs for which the project has applied for credits and why the project was rejected, such information shall not be deemed commercially sensitive information; and
provide the VCS Program validator and verifier, VCS Program project database and VCS Program Registry with the actual rejection document(s) including any additional explanations; and
have the project validated against the VCS 2007.1 requirements.

In the above case the validation against the VCS 2007.1 requirements shall be a full repeat validation rather than a validation based on the difference between the GHG Program which rejected the project and the VCS 2007.1 requirements.

A project rejected by the CDM Executive Board on the grounds of additionality has not been rejected due to ‘procedural or eligibility requirements’. Rather, it has been rejected because of concerns over additionality and given that the equivalent additionality test would need to be applied under the VCS, it cannot be accepted or registered under the VCS.

Are US renewable energy projects eligible under the VCS?
US renewable energy projects are eligible under the VCS. However, such projects can be competitive with conventional energy sources (e.g., wind power projects in specific parts of the country) so it is important that projects clearly demonstrate their additionality. It is therefore expected that an investment analysis is applied, not just a barrier analysis (step 2, not just step 3, when using the CDM additionality tool). Other than in exceptional circumstances, just presenting a barrier analysis is not considered sufficient to demonstrate the additionality of US renewable energy projects. Likewise, the common practice analysis (step 4 of the CDM additionality tool) should be carefully followed to show that the project is not common practice. For example, given the prevalence of wind projects in specific parts of the country, a wind project would need to show clearly why it faces barriers not faced by other wind power projects in the region and why it is unique compared to those other wind projects.

3. Methodologies

What baseline and monitoring methodologies are eligible under the VCS Program?
Projects can use methodologies approved under the VCS Double Approval Process or methodologies approved under a VCS-approved GHG program. The approved list of baseline and monitoring methodologies is available on the Methodologies page.

How are new methodologies developed and approved under the VCS Program?
The VCS Association does not develop new methodologies. Instead, Project Proponents propose new methodologies and these are subject to the VCS Double Approval Process. The essence of the Double Approval Process is that two VCS Validators independently assess the methodology and the new methodology is approved by the VCS Association if both Validators provide a positive assessment of the methodology. Section 3.5 of the VCS 2007.1 document provides the rules for the Double Approval Process and a document with further guidance will be forthcoming and made available on the VCS website.

What is the difference between methodology deviations and methodology revisions?
A Methodology Deviation is a project-specific change to an existing VCS-approved methodology due to a change in the conditions, circumstances or nature of a project. A Methodology Revision, on the other hand, is a global change to an existing VCS-approved methodology due to general developments in knowledge regarding changes in the conditions, circumstances or nature of projects. Methodology Revisions are subjected to the VCS Double Approval Process, whereas Methodology Deviations can be validated as part of the project validation process and are not subject to the VCS Double Approval Process. Further information on Methodology Revisions and Methodology Deviations is available in the VCS 2007.1 document and the VCS Double Approval Process guidance document.

What is Project Grouping?
The VCS Program allows for Grouped Projects, which is similar to the CDM's program of activities approach. Under project grouping, the project can bring together a number of similar activities into one Project Description, with the monitoring of the project undertaken through one central information system. The key flexibility introduced under project grouping is that not all activities need to be identified at the beginning of the project and indicated in the Project Description. For example, a project installing solar PV systems in households does not need to identify and list all households at the start of the project. Instead, new households can be added as the project proceeds. Note that the Project Crediting Period starts from the date that the first (installed) system begins reducing GHG emissions and that all systems installed after the first one will only earn credits for the remainder of the Project Crediting Period.

If I am developing a new methodology, what are the VCS additionality requirements it must meet?
The VCS 2007.1 sets out the requirements for additionality, providing three types of additionality tests (project test, performance test and technology test). It is important to note that these additionality requirements are in no way an additionality tool. New VCS methodologies must provide a full method for demonstrating and assessing additionality, based upon the VCS 2007.1 additionality requirements. For example, one way to do this would be for the methodology to reference and explicitly require the use of the CDM Tool for the Assessment and Demonstration of Additionality. Developers may also develop their own approaches and tools for the demonstration and assessment of additionality.

Can I use a CDM small-scale methodology for a project that exceeds the threshold?
GHG programs such as the CDM provide simplified modalities and procedures for small-scale projects and one component of this can be small-scale methodologies. CDM small-scale methodologies have thresholds set upon them, either within the methodology or in the CDM rules. These thresholds must be observed and complied with when using such methodologies to develop VCS projects.

4. Project Start Date and Project Crediting Period

What is the earliest Project Start Date under the VCS Program?
The Project Start Date is the date on which the project began reducing or removing GHG emissions. The VCS Program makes a distinction between those projects that fall under the AFOLU group and the non-AFOLU group. For non-AFOLU projects, projects cannot start earlier than 1 January 2002 and for AFOLU projects this can be earlier provided that the conditions outlined in Section 5.2.1 of the VCS 2007.1 document are met. In addition, non-AFOLU projects must also complete their validation (either VCS validation or validation under a VCS-approved GHG program such as the CDM) within two years of the Project Start Date. Further guidance on these rules in available in Section 5.2.1 of the VCS 2007.1 document and in the guidance document VCS Project Registration and VCU Issuance Process.

What is the Project Crediting Period under the VCS Program?
The VCS Program makes a distinction between two groups: a) non-AFOLU projects and Agricultural Land Management (ALM) projects focusing exclusively on emissions reductions of N2O, CH4 and/or fossil-derived CO2 and b) AFOLU projects excluding the ALM projects focusing exclusively on emissions reductions of N2O, CH4 and/or fossil-derived CO2. For the first group, the Project Crediting Period is a maximum of ten years, with the possibility to renew this twice. For the second group, the Project Crediting Period is a minimum of 20 years, with a maximum of 100 years.

Can projects issue VCUs after they have reached the end of their crediting period under another GHG program?
Projects that have reached the end of their project crediting period under another GHG program cannot then issue VCUs under the VCS. For example, a CDM project that has reached the end of its ten year project crediting period under the CDM cannot then be registered and have VCUs issued under the VCS.

What is the crediting period for a VCS version 1 project?
Section 5.2.1 sets out that ‘The Project Crediting Period for the VCS v1 shall be the same as for the VCS 2007.1 commencing at the specific Project Crediting Period Start Date’. This means that the crediting period for a VCS version 1 project is ten years, twice renewable, starting at the beginning of the original project crediting period.

5. Project Description, Validation and Verification

What are the requirements for VCS validation for projects registered sequentially with the VCS Program and the CDM?
Projects claiming GHG emission reductions or removals sequentially under the VCS Program and the CDM and where the Project Description and Validation Report adhere to CDM protocols, must complete a further validation of clauses 1.12, 1.13, 1.14, 8.1 and 8.2 of the VCS Project Description template. This is in line with the VCS policy announcement Further Guidance for Projects that are Registered in Two GHG Programs issued on 19 March 2008 and further clarification is provided in the guidance document VCS Project Registration and VCU Issuance Process.

Who is eligible to conduct VCS validation and verification?
Validators and Verifiers approved under a VCS-approved GHG Program (e.g., CDM, CCAR) or under ISO 14065 with scope VCS (through national accreditation bodies) are eligible to perform VCS validations and verifications in the sectoral scopes for which they have been accredited. The list of VCS Validators and Verifiers is available here. The VCS Program also has a temporary accreditation program to provide short-term accreditation to validation and verification bodies that are in the process of obtaining their accreditation under an approved VCS process. Specifically, validation and verification bodies undergoing accreditation procedures under a national accreditation body (IAF member) for accreditation under ISO 14065 with scope VCS Program, CDM Applicant Entities with an Indicative Letter, or Designated Operational Entities seeking an extension of their current sectoral scope of accreditation are eligible to apply under the VCS temporary accreditation program. Validation and verification bodies who want to find out more information on the temporary accreditation process should contact the VCS Association.

What is the cost of VCS validation and verification?
Costs for VCS validation and verification vary depending on the project type, size, location and other factors. Validators and Verifiers provide validation and verification services and as such they are the ones determining fees; the VCS Association plays no role is setting fees for VCS validation and verification. Project proponents and market players wanting to learn more about these costs are advised to speak directly to validation and verification bodies directly.

Who is the project proponent on my project?
The definition for project proponent comes from ISO 14064:2 and is the "individual or organization that has overall control and responsibility for a greenhouse gas project." Correctly identifying the project proponent is crucial in the VCS project registration process because:

The project proponent must sign the project proponent registration representation (in which the PP makes a unilateral representation standing behind the project description and the ERs that will stem from the project) and the project proponent issuance representation (in which the PP makes a unilateral representation standing behind the monitoring report and the ERs it is having issued). Thus, the VCS registry administrator needs to know exactly who the project proponent is, and therefore that the correct entity has signed these representations.
The project record on the VCS project database lists the project proponent, so again it is important that it is clear who that entity is.

Thus, a VCS project description must state who the project proponent is and the VCS validation report needs to confirm this. The project description must not call the project proponent a "project owner", "project participant" or anything else. It is acceptable to have multiple project proponents if there genuinely are multiple entities with control and responsibility for the project. Where a CDM PDD is used, the VCS validation report must make it clear who the project proponent is. Hence, if the PDD contains a number of project participants, the VCS validation report must make it clear who is the project proponent. To be clear, the carbon aggregator/consultant or the CER/VCU buyer is generally not the project proponent, unless they have proof of right to all of the VCUs to be generated from a project over the project crediting period. Such entities generally do not have overall control and responsibility for the project and are not in a position to sign the project proponent registration/issuance representations.

Can a DOE who has been suspended by the CDM Executive Board validate or verify VCS projects?
If an entity loses its accreditation under any of the GHG/accreditation programs recognized by the VCS Program, it can no longer perform VCS validation or verification. If an entity has its accreditation suspended under any of the GHG/accreditation programs recognized by the VCS Program, it cannot issue VCS validation or verification reports for the duration of the suspension. Any VCS validation or verification reports issued before or after the suspension are valid.

6. VCS Registries, Project Database and Project Registration

What is the process for registering a VCS project?
Once projects have been validated, a Project Proponent can request that the project be registered under the VCS. The VCS Registry administrator will check all project documents to ensure due process has been followed and will then request that the project be listed on the VCS Project Database. The project registration process is described in full in the guidance document VCS Project Registration and VCU Issuance Process. The guidance document explains the roles of the various actors and the steps involved in VCS project registration and VCU issuance.

What is the process for issuing VCUs?
Once projects have been validated and their GHG emission reductions or removals verified, a Project Proponent can request issuance of VCUs. The VCS Registry administrator will check all project documents to ensure due process has been followed and will then issue VCUs into the account of the Project Proponent. The project registration process is described in full in the guidance document VCS Project Registration and VCU Issuance Process. The guidance document explains the roles of the various actors and the steps involved in VCS project registration and VCU issuance. Project registration and VCU issuance can be done simultaneously.

Who can register a VCS project and initiate VCU issuance?
The only entities who can apply to have a VCS project registered and VCUs issued are the project owner or an entity to which the project owner has assigned sole right to the GHG emission reductions or removals for the entire project crediting period, or the Authorized Representative of either of these two entities. The only exception to this is as specified under the grandparenting process described in the guidance document VCS Project Registration and VCU Issuance Process (this document also gives details on Authorized Representatives). The project owner is defined as the Project Proponent stated in the Project Description and validated by the validator as having ownership of the project and original right to the projectÕs GHG emission reductions or removals.

Who runs the VCS Registries?
The VCS Registry system is a multi-registry system, with registry services provided by a number of registry providers. VCUs can be transferred between the registries and each is connected to the VCS Project Database. A multi-registry system provides a scalable and competitive registry system suited to market needs.

What information can I find on the VCS Registries if I have an account?
All project information is displayed on the VCS Project Database. As such, it is at the discretion of each VCS Registry as to what information it publicly displays. The VCS Registries should be contacted for further information.

Who can open a VCS Registry account?
Anybody intending to issue, hold, transfer, retire or cancel VCUs needs to open a VCS Registry account and should contact the VCS Registries about opening a VCS Registry account.

What is the VCS Project Database?
The VCS Project Database is a publicly available technology platform that all VCS Registries use to provide a central location for projects approved under the VCS. Specifically, the VCS Project Database presents information on all VCS projects and issued VCUs, lists relevant project-related documents, and tracks the status of issued VCUs.

How does the VCS Project Database work?
The VCS Project Database only lists projects and VCUs that have met all of the VCS criteria and which have been checked by the corresponding VCS Registry. Once a registry has checked project documentation submitted by Project Proponents, the registry submits a request for project registration and/or VCU issuance to the VCS Project Database, which in turn checks the submission against all other projects in the VCS Project Database to ensure uniqueness. Once all of these checks are completed, the VCS Project Database issues unique serial numbers for each VCU. The registry will then issue these VCUs into the account of the Project Proponent.

Who can use the VCS Project Database?
The public can access the VCS Project Database public reports at any time and does not need to open an account. VCS Registries have access to the VCS Project Database to submit project details, documents and requests for VCU issuances.

What reports are publicly available through the VCS Project Database and how can I access them?
The VCS Project Database provides a number of publicly accessible reports. The reports provide comprehensive information about all carbon offset projects developed under the VCS and identify how many VCUs have been issued for each project.

Do I need to have a VCS Registry account if I only want to receive VCUs to offset my carbon footprint?
There are two options. You can open an account, take delivery of VCUs into your account and retire them. Alternatively, you can request that the offset provider from whom you purchased the VCUs retires the VCUs on your behalf, in which case you do not need to open an account.

What are the costs associated with opening and operating a VCS Registry account?
Each of the VCS Registries determines it own fee structure and enquiries should be directed to them. There are special arrangements that each of the registry provide for charitable organizations and small projects.

What are the fees for registering a VCS project and issuing VCUs?
The VCSA charges a EUR 0.04 registration levy for every VCU issued in a VCS Registry. The VCS Registration Levy pays for the VCSAÕs operating costs. Each VCS Registry also charges its own fees for opening and operating registry accounts. Information on fee structures is available directly from each of the VCS Registries and the VCSA does not hold this information.

What do I do if my project is affected by a loss in accreditation or suspension and will not be able to meet the project validation deadline in accordance with VCS 2007.1?
VCS Validators and Verifiers will bring to the attention of the VCS Association any projects that will be affected by a loss in accreditation or suspension and a procedure will be developed for affected projects.

7. Interaction with Other GHG Programs

Are GHG emission reductions or removals generated by CDM projects prior to CDM registration eligible under the VCS Program?
Projects that have been or are planning to be registered under the CDM and that have generated GHG emission reductions or removals prior to the date of CDM registration can apply to have these reductions and removals registered under the VCS Program. In this case the Project Proponent must have clauses 1.12, 1.13, 1.14, 8.1 and 8.2 of the VCS Project Description template validated and submit this as part of the VCS project registration process. The validation can occur at the same time the project has the GHG emission reductions or removals verified.

Can CRTs issued under the CCAR program be converted into VCUs?
GHG emission reductions or removals registered under a VCS-approved GHG program can be converted into VCUs. For example, Climate Reserve Tonnes (CRTs) can be converted into VCUs. The CRTs must be cancelled by the administrator of the CCAR program and evidence of this cancellation must be presented to a VCS Registry as part of the VCS project registration and VCU issuance process. Further information is available in the guidance document VCS Project Registration and VCU Issuance Process. Note that CRTs from projects approved under the CCAR Forest Project Protocol cannot be converted into VCUs because the CCAR Forest Protocol does not rely on a buffer approach to ensure permanence in respect of Agriculture, Forestry and Other Land Use projects.

8. Agriculture, Forestry and Other Land Use Projects

How does the VCS Program handle the issues of permanence and market leakage for AFOLU projects?
All AFOLU projects are required to conduct non-permanence risk assessments and Reduced Emissions from Deforestation and Degradation (REDD) and Improved Forest Management (IFM) projects are required to conduct market leakage assessments. The outcomes are validated by a VCS Validator (and subject to the VCS Double Approval Process in some circumstances, as described in the AFOLU guidance documentation) and provide the basis upon which buffer credits are set aside. Buffer credits are non-tradable and are maintained in an AFOLU Pooled Buffer Account to cover the risk of unforeseen losses in carbon stocks across the AFOLU project portfolio. Further details on the process for assignment, release and cancellation of buffer credits are available in the guidance document VCS Project Registration and VCU Issuance Process

Does the VCS Registration Levy apply to buffer credits?
Project Proponents do not pay the VCS Registration Levy for buffer credits held in the AFOLU Pooled Buffer Account. The levy is payable if and when buffer credits are released from the AFOLU Pooled Buffer Account and converted into VCUs.

What definitions of ‘forest’ can be used?
Forest definitions must meet internationally accepted definitions of what constitutes a forest, and it is the project proponent that provides an appropriate definition of forest. This could be based, for example, on UNFCCC host-country thresholds or FAO definitions. Further guidance on the definition of ‘forest’ and ‘non-forest’ is provided in the Guidance for Agriculture, Forestry and Other Land Use Projects.

VCS 2007.1

Program Guidelines

Projects