New research outlines how “contracted durability” can manage reversal risk and improve confidence in carbon removal credits
Washington, DC —June 16 The American Forest Foundation (AFF), Beyond Alliance, and RMI today released findings that introduce a new legal and financial framework to manage risk for all carbon removal pathways that will bolster the integrity and scalability of the market.
Along with rapidly reducing emissions, carbon dioxide removal (CDR) is essential to meeting vital and ambitious global climate goals. Carbon markets are critical to scaling CDR because they provide essential funding through the sale of carbon credits. However, their rules are still evolving, particularly around the concept of durability, or how long carbon represented by a credit remains stored and out of the atmosphere.
The recent analysis presents existing approaches to managing CDR reversal risk, or the risk of stored carbon being released back into the atmosphere, and outlines how the market currently lacks a consistent long-horizon framework that works for all removal types and policy contexts. “Contracted durability” works to ensure ongoing liability and provides tools to compensate for reversals. This approach enables any carbon removal pathway to achieve policy-relevant durability thresholds, significantly boosting the integrity and scalability of the carbon market.
A core challenge is that the permanence or durability requirements embedded in policy often exceed those of carbon crediting programs, creating a gap in responsibility for ensuring that carbon remains stored. The paper argues that while there are some existing approaches to managing CDR reversal risk— namely buffer pools— the market still lacks a consistent long-horizon framework that works for all removal pathways and policy contexts. Contracted durability changes that by fulfilling two core functions: assigning ongoing liability and providing tools to compensate for reversals for the duration required by the policy.
Mechanisms that fulfill both functions of contracted durability include horizontal stacking, which replaces an original credit with a new one, and a permanence trust, which assumes ongoing liability for reversals and is funded through a per-credit fee to address any reversals. Buffer pools and insurance mechanisms may also contribute to contracted durability, but neither alone can deliver on both functions.
AFF recently released preliminary findings from their Permanence Trust feasibility study, indicating this mechanism shows promise in operationalizing contracted durability. AFF is taking steps to develop a pilot for a permanence trust.
“Contracted durability is the framework the market has been waiting for,” said Lynn Riley, Lead Scientist at AFF. “It provides a clear blueprint to manage risk for all stakeholders, removes barriers to investment, and unlocks billions of dollars to scale carbon dioxide removal solutions. It’s a win-win for people and the planet.”
“The voluntary carbon market scales when buyers trust it,” said Luke Pritchard, Director of the Beyond Alliance. “Contracted durability gives companies something concrete to demand and sends a market signal making high-integrity CDR financeable at scale.”
“Thoughtful policymakers are eager to create frameworks that support a broader portfolio of carbon removal pathways,” said Kyle Clark-Sutton, Principal at RMI. “We believe that contracted durability is one of the tools needed to achieve this while maintaining a high bar for quality and integrity, shifting the focus from the type of carbon removal project to whether the climate outcome is reliably maintained over time.”
Read the full white paper here.
###
About the Beyond Alliance
Beyond unites leading companies, NGOs, and other expert partners to make corporate climate investment go further. Founded in 2020 and housed within the We Mean Business Coalition, we are an independent platform that helps companies move from climate commitment to climate action.
We equip companies with the knowledge and tools to invest with confidence, bring members together for trusted peer exchange, and help shape the voluntary standards and policies that make market-based climate investment possible — moving further and faster toward a zero-carbon future. Learn more at beyond-alliance.org.
About the American Forest Foundation
The American Forest Foundation is a national organization that empowers family forest owners to deliver meaningful conservation impact. The organization’s programs, the Family Forest Carbon Program and the American Tree Farm System, help landowners implement forest management practices to care for the health and productivity of their woodlands. To learn more about the American Forest Foundation and the Family Forest Carbon Program, visit www.forestfoundation.org.
About RMI
Rocky Mountain Institute (RMI) is an independent, nonpartisan nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to secure a prosperous, resilient, clean energy future for all. In collaboration with businesses, policymakers, funders, communities, and other partners, RMI drives investment to scale clean energy solutions, reduce energy waste, and boost access to affordable clean energy in ways that enhance security, strengthen the economy, and improve people’s livelihoods. RMI is active in over 50 countries.