Voluntary Nature and Carbon Markets: Domestic Scheme Endorsement Criteria

Disclaimer

Government recognition or endorsement of voluntary market schemes (whether international or operating in New Zealand) is intended solely as a quality signal made at the time of assessment, and does not constitute a Crown guarantee, warranty, or acceptance of responsibility or liability for any aspect of, or participation in a scheme.

Endorsement does not imply that MCERT or the Crown guarantees:

• the performance of a scheme, methodology or project
• that environmental outcomes will be achieved or maintained
• the quality, value or future use of any credit
• financial returns or market performance 
• claims made by scheme operators, purchasers of credits or secondary market users of credits.

Assessments undertaken for the purpose of endorsement are conducted by independent assurance practitioners. Endorsement, and any assessment report prepared for endorsement purposes, should not be relied upon as legal, financial, investment or other professional advice.

Market participants remain responsible for undertaking their own due diligence and making their own assessment of quality and credibility. To the extent permitted by law, the Crown accepts no responsibility or liability for any loss, damage or claims arising from reliance on an endorsement, assessment report, or any voluntary market scheme.

The endorsement criteria are the benchmark against which the operations of the scheme are assessed. They give practical effect to the integrity principles and provide a consistent basis for evaluating a scheme.

Conformity with the criteria indicates that a scheme operates with competence, consistency and impartiality, and aligns with international best practice. 

Endorsement confirms that a scheme has been assessed as meeting the criteria in this section at the time of assessment.

MCERT may review an endorsement where it becomes aware of information that may affect a scheme’s conformity with the endorsement criteria.

Endorsement may be suspended or withdrawn, subject to appropriate due process, if MCERT determines that a scheme no longer meets the requirement for endorsement, including by operating in a manner that is inconsistent with the integrity principles.

2.1    Scheme governance

Relevant integrity principles: All the integrity principles apply

The organisation operating the scheme must have an effective governance structure (eg, a board, group of people or a person) with overall authority and responsibility for scheme operations that supports overall quality of the credits issued to projects. Requirements for the governance structure include:

• being fully accountable to the shareholders and/or beneficiaries of the organisation operating the scheme
• having appropriate policies and procedures to operate the scheme and manage members’ and/or trustees’ interests
• ensuring implementation of scheme policies and processes
• ensuring impartiality of scheme operations including project assessment 
• ensuring adequate resources and competency for project assessment activities
• ensuring that risks to scheme operations are identified and managed
• ensuring transparent decision-making, reporting and dispute-resolution processes
• ensuring that the scheme upholds the integrity principles. 

2.2    Scheme operations

Relevant integrity principles: All the integrity principles apply

The scheme must have a suitable management, quality and administrative system with policies, processes and procedures covering:

• financial management to ensure that there are sufficient funds to operate the scheme, including appropriate professional indemnity and public liability insurance
• engagement and contracting with project developers and owners
• development and maintenance of scheme requirements and standards
• recruitment and training of staff to maintain relevant competency
• secure record keeping and information management
• competency requirements and performance monitoring of independent validators and verifiers
• project certification, renewal, suspension and revocation procedures
• handling of complaints and appeals.

2.3    Project registration

Relevant integrity principles: all the integrity principles apply

When registering a project, the scheme must collect information and evidence from the project developer or owner including:

• project name and description
• project location (maps, grid reference, etc.), net area and description
• land ownership and legal rights to carry out project activities
• rights to the anticipated nature and/or carbon outcomes
• project implementation date (when work starts on site) and anticipated end date, if any (eg, 100 years after start date)
• project method or standard to be used for the project and how it has been or will be scientifically assessed 
• predicted nature and/or carbon outcomes expected over the project lifetime
• definition of the units that will be used to measure project outcomes
• description of the method that will be used to quantify project outcomes
• expected project validation and verification requirements and standards
• proposed monitoring and reporting requirements for project performance
• how the project methodology is aligned to the integrity principles.

2.4    Project development, operation and monitoring

Relevant integrity principles: additional; durable and permanent; real, measurable, verifiable outcomes and risk mitigation; respectful of rights

The scheme must have strict requirements and rules for the development and operation of projects demonstrated by:

• provision of requirements and procedures for project owners to develop and operate a project
• requiring project development to be based on a project methodology independently assessed as having appropriate scientific rigour
• having requirements in place for developing, approving, reviewing, updating and/or retiring project methodologies
• requiring project design and projected (ex-ante) outcomes to be (independently) validated.
• The nature-based or carbon (ex post) outcomes must be robustly quantified, monitored and reported, demonstrating that the scheme has requirements for project developers to:
  • quantify the nature and/or carbon outcomes
  • apply appropriate quantification methodologies that are reliable and accurate, based on conservative² approaches and sound scientific methods
  • define the units for nature and/or carbon outcomes
  • monitor and report regularly on project performance and outcomes.

^{2 A ‘conservative approach’ protects against quantification of project outcomes being overstated.}

2.5    Project outcome assessment

Relevant integrity principles: all the integrity principles apply

The scheme must have robust requirements (standards) for independent verification of the project outcomes that relate to the project methodology and application of the integrity principles. The scheme must demonstrate:

• project design was based on a scientifically assessed project methodology
• project design and projected outcomes are independently and adequately validated during the ‘Project development, operation and monitoring’ step.
• actual project outcomes have been independently verified by a suitably qualified verification provider
• project design, development and operation of the project and measurement and reporting project outcomes have appropriately applied the integrity principles.

Suitable verification standards include ISO 14064-3,³ ISAE 3410⁴ and ISAE 5000.⁵

The scheme must as part of its project assessment standard specify the expected qualifications and competency for project validation and verification provision, being either:

• an accredited validation and verification body (VVB) (eg, ISO 14065⁶), or
• an organisation or person that holds appropriate technical qualifications and relevant experience (see appendix 2).

^{3 ISO 14064-3:2019. Greenhouse gases – Part 3 Specification with guidance for the verification and validation of greenhouse gas statements.}

^{4 ISAE 3410:2022. International Standard on Assurance Engagements (ISAE) 3410. Assurance engagements on greenhouse gas statements. Note that ISAE 3410 is being withdrawn from December 2026 and is replaced by ISAE 5000.}

^{5 ISAE 5000:2026. International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements.}

^{6 ISO 14065: 2020. General principles and requirements for bodies performing validation and verification of environmental information statements.}

2.6    Project data and reporting requirements 

Relevant integrity principles: real, measurable, verifiable outcomes and risk mitigation; transparent; not double-counted and supports accurate claims

The scheme must have effective rules for compiling and reporting project information and project outcomes, demonstrated by:

• publication of project documentation (eg, via a registry) including, as a minimum, project design, details of project location and area (subject to any privacy and data protection restrictions), and progress monitoring reports
• disclosing the boundary for the project activity (physical, administrative, geographic, jurisdictional) and demonstrating that it is conservative and robust, accounting for all significant aspects of the project 
• disclosing the methodology used to calculate project outcomes
• assessing all sources of uncertainty in the project outcomes associated with both project baseline and eligible project activities, and identifying the methods used to assess uncertainty (based on reputable peer-reviewed sources or considered to be rigorous by validators and verifiers)
• procedures for determining buffers (based on levels of uncertainty at levels deemed acceptable by validators and verifiers)
• measures, as relevant, to manage leakage including:
  • procedures for assessing the likelihood of project activities leading to an increase in emissions elsewhere (leakage) including measures for identifying and mitigating leakage and accounting for any unavoidable leakage⁷
  • processes for monitoring and mitigating leakage for the duration of the crediting and permanence periods
  • estimation of leakage is robust and conservative, and considers assumptions, models, parameters, data sources and measurement methods.

^{7 Integrity Council for the Voluntary Carbon Market (ICVCM). 2024. Core Carbon Principles, Assessment Framework and Assessment Procedure. Version 1.1.}

2.7    Credit issuance 

Relevant integrity principles: not double counted and supports accurate claims

The scheme must have robust processes for issuing and tracking the credits it issues, demonstrated through:

• credits are issued only after independent validation of projected outcomes (ex-ante credits) or independent verification of ‘actual’ project outcomes (ex-post) and listing the credits on the scheme registry
• specific rules and limitations for the issue and use of ex-ante credits, eg, ‘the use and/or retirement of ex-ante credits is prohibited’
• carbon credits based on quantified and verified carbon removals are equivalent to one metric tonne of carbon dioxide equivalent 
• nature credits based on quantified and verified nature outcomes are reported using the units specified by the project methodology
• specification of the crediting period and criteria for renewal of crediting periods including reassessment of baselines and whether eligibility criteria (eg, integrity criteria) for the issuance of carbon credits can still be met
• evidence that the seller of the nature and/or carbon credits has the legal ownership rights to the project outcomes.

2.8    Credit tracking

Relevant integrity principles: transparency, not double counted and supports accurate claims

The scheme must operate a public registry (or provide an equivalent facility) or use a third party registry to uniquely identify, record and track project activities and credits issued to ensure that credits can be identified securely and unambiguously by requiring:

• project documentation (subject to privacy/data protection restrictions), credits, assignments and retirements to be publicly listed on the (scheme) registry
• identification of the entity on whose behalf the credit was retired
• identification of the purpose of the credit retirement
• procedures to address erroneous issuance of credits including remedial identification of measures and the entities responsible for implementing these
• the length and number of crediting periods to be proportionate to the type of project activity and confidence in measurement technique, reliance on modelled outcomes and risk mitigations such as buffers.

2.9    Transparent public information 

Relevant integrity principles: transparent

The scheme must provide comprehensive and transparent publicly available information on all credited project outcomes including:

• project design document
• validation and verification reports
• monitoring reports
• credit-tracking information.

2.10    Selling credits

Relevant integrity principles: transparent, not double counted and supports accurate claims

Sellers must be responsible for the integrity of credits sold and for demonstrating that integrity to buyers. Marketing of credits, including any claims about the origin and quality of the credits, should comply with the Government’s Guidance for Voluntary Climate Change Mitigation⁸.

^{8 Ministry for the Environment. 2026. Guidance for Voluntary Climate Change Mitigation. Wellington: Ministry for the Environment.}