Why was this introduced?

Because one of the issues at stake is the possible consequences of carbon sequestration reversals, and therefore the law needs to provide mechanisms to manage this risk.

Purpose of the insurance:

  • To cover possible situations of reversal of sequestered emissions
  • To replace or supplement the guarantee pool

What is the guarantee pool?

A portfolio consisting of a portion of the carbon credits generated by projects that are used to offset unintentional emissions reversals.

Other notes:

It is the promoter who chooses the desired option when registering the project: insurance, the guarantee pool or both, with the guarantee pool acting as a complement to the insurance in the latter case.

Other details of the insurance, such as minimum capital and conditions, will be determined by order of the members of the government responsible for finance, the environment and climate action.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.