Section 95983 - Forestry Offset Reversals(a) For forest sequestration projects, a portion of ARB offset credits issued to the forest offset project will be placed by ARB into the Forest Buffer Account. (1) The amount of ARB offset credits that must be placed in the Forest Buffer Account shall be determined as set forth in the applicable version of the Compliance Offset Protocol in section 95973(a)(2)(C)4.(2) ARB offset credits will be transferred to the Forest Buffer Account by ARB at the time of ARB offset credit registration pursuant to section 95982.(3) If a forest offset project is originally submitted through an Offset Project Registry an equal number of registry offset credits must be removed or cancelled by the Offset Project Registry, such that the registry offset credit is no longer available for transaction on the Offset Project Registry system, and issued by ARB for placement in the Forest Buffer Account.(4) The ARB offset credits placed into the Forest Buffer Account must correspond to the Reporting Period for which the ARB offset credits are issued.(b) Unintentional Reversals. If there has been an unintentional reversal, the Offset Project Operator or Authorized Project Designee must notify ARB and the Offset Project Registry, in writing, of the reversal and provide an explanation for the nature of the unintentional reversal within 30 calendar days of its discovery. (1) In the case of an unintentional reversal the Offset Project Operator or Authorized Project Designee shall provide in writing to ARB and an Offset Project Registry, if applicable, a completed verified estimate of current carbon stocks within the offset project boundary within 23 months of the discovery of the unintentional reversal. To determine the verified estimate of current carbon stocks a full offset verification must be conducted pursuant to sections 95977 through 95978, including a site visit. The verified estimate may be submitted as a separate offset verification services, or incorporated into a chapter of the detailed verification report submitted pursuant to section 95977.1 when offset verification services are conducted for an Offset Project Data Report. After an unintentional reversal, the Offset Project Operator or Authorized Project Designee does not need to submit an Offset Project Data Report until the required verified estimate of current carbon stocks within the offset project boundary is completed.(2) If ARB determines that there has been an unintentional reversal, and ARB offset credits have been issued to the offset project, ARB will retire a quantity of ARB offset credits from the Forest Buffer Account according to section 95983(b)(2)(A) or (B), as applicable. (A) If the forest project came into the program directly under a Compliance Offset Protocol and did not transition from an Early Action Offset Program, ARB will retire ARB offset credits in the amount of metric tons CO2e reversed for all Reporting Periods.(B) If the forest project transitioned into the program originally from an Early Action Offset Program, ARB will retire ARB offset credits from the Forest Buffer Account according to the following equation, calculated for all Reporting Periods, rounded up to the nearest whole metric ton CO2e: Click here to view image
Where:
"ARBRetire" is the number of ARB offset credits that must be retired from the ARB Forest Buffer Account to compensate for the unintentional reversal for all Reporting Periods;
"ARBCredits" is the total number of ARB offset credits issued to the forest project for all Reporting Periods, including any ARB offset credits that were issued for early action and any that were placed into the Forest Buffer Account for all Reporting Periods;
"EAOPCredits" is the total number of early action offset credits issued to the forest project by the Early Action Offset Program for all Reporting Periods, including any voluntary offset credits placed into the Early Action Offset Program's buffer account for forest projects that were not transferred to ARB's Forest Buffer Account, but excluding any early action offset credits that were issued ARB offset credits; and
"Reversal" is the total metric tons of CO2e reversed for all Reporting Periods.
(c) Intentional Reversals. Requirements for intentional reversals are as follows: (1) If an intentional reversal occurs, the Offset Project Operator or Authorized Project Designee shall, within 30 calendar days of the intentional reversal: (A) If the forest project came into the program directly under a Compliance Offset Protocol and did not transition from an Early Action Offset Program, the forest owner must turn in valid compliance instruments in the amount of metric tons CO2e reversed for all Reporting Periods.(B) Provide a written description and explanation of the intentional reversal to ARB and the Offset Project Registry, if applicable.(2) Within one year of the occurrence of an intentional reversal, the Offset Project Operator or Authorized Project Designee shall submit to ARB and the Offset Project Registry, if applicable, a completed verified estimate of current carbon stocks within the offset project boundary. To determine the verified estimate of current carbon stocks a full offset verification must be conducted pursuant to sections 95977 through 95978, including a site visit. The verified estimate may be submitted as a separate offset verification services, or incorporated into a chapter of the detailed verification report submitted pursuant to section 95977.1 when offset verification services are conducted for an Offset Project Data Report.(3) If an intentional reversal occurs from a forest offset project, and ARB offset credits have been issued to the offset project, the current or most recent (in the case of an offset project after the final crediting period), forest owner(s) must submit to ARB for placement in the Retirement Account a quantity of valid ARB offset credits or other approved compliance instruments pursuant to subarticle 4 within six months of notification by ARB in the amount determined pursuant to sections 95983(c)(3)(A) or (B), as applicable: (A) If the forest project came into the program directly under a Compliance Offset Protocol and did not transition from an Early Action Offset Program, the forest owner must turn in valid compliance instruments in the amount of metric tons CO2e reversed for all Reporting Periods.(B) If the forest project transitioned into the program originally from an Early Action Offset Program, the forest owner must turn in valid compliance instruments according to the following equation, calculated for all Reporting Periods, rounded up to the nearest metric ton CO2e: Click here to view image
Where:
"FOReplace" is the number of valid compliance instruments that the forest owner must turn in to compensate for the intentional reversal for all Reporting Periods;
"ARBCredits" is the total number of ARB offset credits issued to the forest project for all Reporting Periods, including any ARB offset credits that were issued for early action and any that were placed into the Forest Buffer Account for all Reporting Periods;
"EAOPCredits" is the total number of early action offset credits issued to the forest project by the Early Action Offset Program for all Reporting Periods, including any voluntary offset credits placed into the Early Action Offset Program's buffer account for forest projects that were not transferred to ARB's Forest Buffer Account, but excluding any early action offset credits that were issued ARB offset credits; and
"Reversal" is the total metric tons of CO2e reversed for all Reporting Periods.
(C) Notification by ARB will occur after the verified estimate of carbon stocks referred to in section 95983(c)(2) has been submitted to ARB, or after one year has elapsed since the occurrence of the reversal if the Offset Project Operator or Authorized Project Designee fails to submit the verified estimate of carbon stocks.(D) If the forest owner does not submit valid ARB offset credits or other approved compliance instruments in the amount required pursuant to sections 95983(c)(3)(A) or (B) to ARB within six months of notification by ARB, ARB will retire a quantity of ARB offset credits equal to the difference between the number of metric tons of CO2e determined pursuant to sections 95983(c)(3)(A) or (B) and the number of retired approved compliance instruments from the Forest Buffer Account and the forest owner will be subject to enforcement action and each ARB offset credit retired from the Forest Buffer Account will constitute a separate violation pursuant to section 96014.(4) Early Project Terminations. If a project termination, as defined in the Compliance Offset Protocol in section 95973(a)(2)(C) (4.), occurs from a compliance or early action forest offset project, and ARB offset credits have been issued to the offset project, the current or most recent (in the case of an offset project after the final crediting period), forest owner(s) must submit to ARB for placement in the Retirement Account a quantity of valid ARB offset credits or other approved compliance instruments pursuant to subarticle 4 in the amount equal to the number of ARB offset credits issued to the offset project for each Reporting Period, except for improved forest management forest offset projects. If the project is an improved forest management forest offset project, the amount of metric tons CO2e reversed must be multiplied by the compensation rate in the Compliance Offset Protocol in section 95973(a)(2)(C)4. (A) ARB will notify the forest owner of how many ARB offset credits must be replaced with valid compliance instruments.(B) The forest owner must submit to ARB for placement in the Retirement Account a valid ARB offset credit or another approved compliance instrument pursuant to subarticle 4 for each ARB offset credit required to be replaced within six months of ARB's retirement.(C) If the forest owner does not submit valid ARB offset credits or other approved compliance instruments to ARB in the amount required pursuant to section 95983(c)(4) within six months of ARB's retirement, ARB will retire a quantity of ARB offset credits equal to the difference between the number of metric tons of CO2e determined pursuant to section 95983(c)(4) and the number of retired approved compliance instruments from the Forest Buffer Account and they will be subject to enforcement action and each ARB offset credit retired from the Forest Buffer Account will constitute a separate violation pursuant to section 96014.(d) Disposition of Forest Sequestration Projects After a Reversal. If a reversal lowers the forest offset project's actual standing live carbon stocks below its project baseline standing live carbon stocks, the forest offset project will be terminated by ARB or an Offset Project Registry.(1) If the forest offset project is terminated due to an unintentional reversal, ARB will retire from the Forest Buffer Account a quantity of ARB offset credits equal to the total number of ARB offset credits issued pursuant to section 95981, and where applicable, all ARB offset credits issued to the offset project pursuant to the Program for Recognition of Early Action Offset Credits, over the preceding 100 years.(2) If the forest offset project is terminated due to an unintentional reversal, another offset project may be initiated and submitted to ARB or an Offset Project Registry for listing within the same offset project boundary.(3) If the forest offset project has experienced an unintentional reversal and its actual standing live carbon stocks are still above the approved baseline levels, it may continue without termination as long as the unintentional reversal has been compensated by the Forest Buffer Account. The Offset Project Operator or Authorized Project Designee must continue contributing to the Forest Buffer Account in future years as quantified in section 95983(a)(1).(4) If the forest offset project is terminated due to any reason except an unintentional reversal, new offset projects may not be initiated within the same offset project boundary, unless otherwise specified in a Compliance Offset Protocol.(e) Change of Forest Owner or Offset Project Operator. When a Forest Owner or Offset Project Operator changes, whether by merger, acquisition, or any other means, the successor Forest Owner or Offset Project Operator, after the change in ownership, as applicable, is expressly liable for all obligations of the predecessor Forest Owner or Offset Project Operator to submit compliance instruments as determined pursuant to sections 95983(c)(3). For the avoidance of doubt, this obligation of the successor Forest Owner or Offset Project Operator, as applicable, consists of the difference between the number of metric tons of CO2e determined pursuant to sections 95983(c)(3) and the number of valid ARB offset credits or other approved compliance instruments submitted by the predecessor forest owner pursuant to sections 95983(c)(3).Cal. Code Regs. Tit. 17, § 95983
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment filed 6-26-2014; operative 7-1-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
3. Amendment of subsection (a)(1) filed 12-31-2014; operative 1-1-2015 pursuant to Government Code section 11343.4(b)(3) (Register 2015, No. 1).
4. Amendment filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
5. New subsection (e) filed 3-29-2019; operative 3-29-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13). Note: Authority cited: Sections 38510, 38560, 38562, 38570, 38571, 38580, 39600 and 39601, Health and Safety Code. Reference: Sections 38530, 38560.5, 38564, 38565, 38570 and 39600, Health and Safety Code.
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment filed 6-26-2014; operative 7-1-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
3. Amendment of subsection (a)(1) filed 12-31-2014; operative 1-1-2015 pursuant to Government Code section 11343.4(b)(3) (Register 2015, No. 1).
4. Amendment filed 9-18-2017; operative 10/1/2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
5. New subsection (e) filed 3-29-2019; operative 3/29/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).