What if the project is damaged by fire or storm?

Any carbon loss (whether it be accidental or deliberate) directly affects the potential number of VCUs issued to all members of a grouped project. Arbonics believes that landowners should not be penalised for losses incurred by other landowners, but we also believe that landowners should be incentivised to minimise carbon losses wherever possible. Arbonics is developing a landowner protection mechanism to limit the collateral damage caused by accidental losses.

The protection mechanism works like this:

• The Arbonics MRV system will monitor all project instances separately. The system will monitor and report both emission removals and carbon losses

• Landowners that generate a carbon loss during a monitoring period (Affected Landowners) will not receive VCUs, however, they will not have to return previously earned VCUs

• Landowners that generate emission removals during a monitoring period (Non-affected Landowners) will be allocated VCUs proportional to their removals measured for the monitoring period

• Allocating all VCUs earned to Non-affected Landowners will create an issuance gap, as Arbonics will distribute more VCUs to landowners than Arbonics receives for the affected monitoring period (with or without the Verra buffer contributions).

• Arbonics will cover the issuance gap, up to the maximum extent of the Arbonics insurance pool (depending on risk factors, this is between 5-10% of the total VCUs issued by the project to date; it is separate from the Verra buffer pool and its aim is to protect the interests of all our landowner partners by ensuring loss by one does not significantly impact others)

• Affected landowners will not receive VCUs in subsequent monitoring periods until their newly generated VCUs from their land have covered the their share of the issuance gap to the Arbonics issuance pool - after that, they will continue to receive VCUs as normal.