Many climate protection projects require upfront finance and often use forward sales of Emission Reductions, that is, securing sales before the actual issuance of the unit. This is particularly relevant in the land use context because project cycles are longer, reflecting the time it takes to sequester CO2 in forests and other carbon sinks. However, untracked forward sales do not provide buyers with sufficient protection, increasing the risk of over-selling the anticipated outcomes, and thus threaten environmental integrity.
Gold Standard enables the registration of number of expected emission reductions following project performance certification to a limit of five years forward using scientific calculations to ensure that the quantity is not overestimated. These are registered as ‘Planned Emission Reductions’. and can be traded but not retired. Once the emission reductions have been verified, these units are Verified Emission Reductions and may be retired and used for carbon or climate neutrality claims.