Climate Action Reserve (CAR): Two CCP-Approved Protocols, a Modular Framework & the 2026 Transition

Mexico Forest v3.0 and U.S. Soil Enrichment v1.1 are ICVCM CCP-approved (October 2025, with conditions), CCP credit tagging is live, and CAR’s entire protocol architecture is moving to a modular Common Protocol plus Jurisdiction Module structure — public comment runs through 27 April 2026.

By Abhishek Das • April 2026 • 14 min read

1. Why CAR Is the Compliance-DNA Outlier
2. California Origin — From CCAR to the Climate Action Reserve
3. Protocol Development Process & Workgroup Governance
4. The Modular Protocol Structure (March 2026)
5. The Two CCP-Approved Protocols
6. CCP Credit Tagging — The Five-Step Process
7. The 40-Year Permanence Requirement
8. The Wider Reserve Protocol Portfolio
9. U.S. Forest Protocol — The Integrity Response
10. The Forest Buffer Pool & Reversal Risk
11. CORSIA & Host Country Authorization
12. Commercial Implications for Developers & Buyers
13. Frequently Asked Questions
14. What Project Developers & Buyers Should Do Now

Why CAR Is the Compliance-DNA Outlier

Most voluntary carbon registries were built for voluntary markets first, compliance markets second (or not at all). CAR is the exception. It emerged from California legislation, built the inventory infrastructure that later underpinned Cap-and-Trade, and then became the template for the ARB Compliance Offset Protocols. That compliance DNA is why CAR’s 2026 positioning is unusual.

Where Verra is running a VCS v5 overhaul and Gold Standard is executing a mandatory Paris transition, CAR’s 2026 story is execution, not reform. Two Reserve protocols — Mexico Forest v3.0 and U.S. Soil Enrichment v1.1 — are already ICVCM CCP-approved (October 2025, with conditions). The CCP credit tagging process is live, a modular protocol architecture is in public comment, and the CORSIA host-country authorization playbook is detailed and operational. The headline for CRT buyers: the integrity work is underway, not promised.

CAR issues Climate Reserve Tonnes (CRTs) — one metric tonne of CO₂e reduced or removed under a Reserve protocol, third-party verified, held on the CAR registry. CRTs are distinct from California’s ARB Offset Credits (ARBOCs), even though many Reserve Protocols seeded the Compliance Offset Protocols that generate ARBOCs.

California Origin — From CCAR to the Climate Action Reserve

The story begins in 2001, when California established the California Climate Action Registry (CCAR) to run a voluntary GHG inventory for California companies. That inventory infrastructure later became the technical backbone of Cap-and-Trade.

As the voluntary offset market grew, CCAR developed the Reserve Protocols. When ARB finalised Cap-and-Trade, it turned to those Reserve Protocols as the starting point — the ARB Compliance Offset Protocols for U.S. Forest, Livestock, ODS, Mine Methane Capture and Urban Forest Projects were substantially built on CAR’s prior work.

In 2008 the offset-registry function was spun off as the Climate Action Reserve. Today CAR is a North American voluntary carbon registry issuing CRTs under publicly-developed, workgroup-led protocols — closely aligned with California’s compliance ecosystem without being part of it.

Protocol Development Process & Workgroup Governance

The Reserve Offset Program Manual codifies a multi-stage, publicly-consulted protocol development process substantially more elaborate than most voluntary standards. In summary:

• Concept & screening. Internal or external submission via Protocol Concept Form; screened against direct reductions, standardisable baselines, avoidance of cap-overlap, scale, E&S impact, data and resourcing.
• Issue Paper → Scoping Meeting → Drafting. A balanced multi-stakeholder Workgroup (industry, agencies, ENGOs, developers, verifiers, academics) iterates the draft; observers can listen but not comment until public review.
• Local Stakeholder Consultation. Mandatory outreach to agencies, impacted communities and ENGOs in the project area — designed to surface safeguarding issues early and trigger FPIC where relevant.
• Public review & adoption. 30-day public review + workshop, written comments addressed, Board adoption at a quarterly public meeting. New Jurisdiction Modules get 15 days of comment, Technical Guidance Modules 14 days.
• Cadence. Programmatic review every three years; Policy Revisions (eligibility/quantification) always trigger 30-day comment + board adoption; Program Revisions (editorial/technical) can be adopted without comment but are still posted and notified to account holders.

The Modular Protocol Structure (March 2026)

On 30 March 2026 CAR released a policy memorandum fundamentally changing how Reserve protocols are structured. Historically, each protocol has been a stand-alone document for a single jurisdiction (U.S. Forest, Mexico Forest and Canada Forest have each been separate rulebooks for the same underlying project activity). That architecture produced duplication and made it hard to keep protocol families aligned as best practice evolved.

The new Modular Protocol Structure splits each protocol into three layers:

• Common Protocol — cross-jurisdiction requirements: project definition, eligibility, additionality, crediting period, safeguards, GHG boundary, quantification, monitoring, reporting, verification.
• Jurisdiction Module — country-specific data, Performance Standard and Legal Requirements Tests, local thresholds. Governs conflicts with the Common Protocol.
• Technical Guidance Module (optional) — implementation guidance on aggregation, sampling, data collection — without changing any requirements.

Projects must report under both a Common Protocol and the applicable Jurisdiction Module. Each layer is versioned independently, so CAR can update one without cascading revisions.

The transition is gradual. Existing listed and registered projects may continue reporting under their jurisdiction-specific protocol, and new projects get a 30-day grace period from any new version’s adoption date. CAR will seek CCP approval for all protocol updates under the new framework, preserving the CCP-approved status of Mexico Forest v3.0 and U.S. Soil Enrichment v1.1.

The commercial implication is significant: a developer validated once on a Common Protocol can extend into a new country by adding the relevant Jurisdiction Module instead of learning a new rulebook. Multi-country portfolios in soil enrichment, mangrove, livestock and grassland are the obvious beneficiaries. Public comments are accepted through Monday 27 April 2026.

The Two CCP-Approved Protocols

In October 2025 the ICVCM Assessment Platform issued positive category-level decisions for two Reserve protocols: the Mexico Forest Protocol v3.0 (CARMX Forest IFM v3) and the U.S. Soil Enrichment Protocol v1.1 (CAR US SEP v1.1). Both are approved with conditions — meaning specific issues must be addressed via project-level changes, Errata & Clarifications, or both, before individual credits can carry the CCP label.

Mexico Forest v3.0 matters because it is one of the few CCP-approved Improved Forest Management methodologies outside the United States — and it is designed for Mexico’s ejido and community-forest tenure context with Spanish-language documentation and tenure-aware safeguards. For CCP buyers with Latin American exposure, it is a meaningful option.

U.S. Soil Enrichment v1.1 matters for a different reason: soil carbon has been one of the most contested VCM categories because of measurement and permanence concerns. A CCP label on an active soil protocol is a meaningful signal that those concerns can be addressed within a well-designed rulebook.

CCP Credit Tagging — The Five-Step Process

Because both protocols were approved with conditions, there is a defined process for tagging previously-issued credits as CCP-labelled. CAR published the process in a 23 February 2026 policy memorandum, building on its June 2024 CCP tagging policy.

Step 1 — Project Assessment. Developer reviews ICVCM conditions and protocol Errata & Clarifications. Three paths: (a) no changes needed → proceed to Step 2; (b) permanence extension to 40 years only (no quantification impact) → no re-verification; (c) eligibility or quantification changes → re-verification required, with a ‘true-up’ in the current reporting period if fewer tonnes become eligible.

Step 2 — CCP Labeling Request Form. Developer submits a protocol-specific form (on each protocol’s Reserve page) or contacts the Reserve Administrator directly if no form is published.

Step 3 — Re-verification (if needed). Engage a Verification Body, submit a NOVA/COI Form, prepare a protocol-specific CCP Verification Report Addendum covering all relevant periods, and issue a new Verification Opinion per reporting period.

Step 4 — Reserve Review. 10 business-day review and feedback window.

Step 5 — CCP Credit Tagging. Once clarifications are addressed, the Reserve Administrator tags eligible credits by issuance batch. Tagged credits can then be retired with the CCP label.

The key operational question is which Step 1 path applies, because that drives cost and timeline. A permanence-only adjustment is nearly free; full re-verification plus true-up can be materially expensive at scale.

The 40-Year Permanence Requirement

ICVCM has standardised on 40 years as the minimum permanence commitment for CCP-labelled land-sector credits. Earlier voluntary projects used 25, 30 or 100-year periods — 40 years is the new floor.

The February 2026 memo carves out a light-touch path: if permanence extension is the only change and quantification is unaffected, no re-verification is required — the Reserve implements the modified commitment directly. That is a meaningful carve-out for Mexico Forest and Soil Enrichment projects where quantification is already CCP-aligned but contractual permanence was originally shorter.

Buyers should examine the legal form of the extended commitment — conservation easements, deed restrictions, long-term management plans with contractual penalties. A CCP label is only as strong as the legal architecture behind the commitment, and forward-sale negotiators should ask specifically how each project has implemented its 40-year lock.

The Wider Reserve Protocol Portfolio

Beyond the two CCP-approved protocols, CAR runs an active portfolio across industrial gases, waste methane, land-sector removals and agriculture. Several are strong candidates for further CCP category decisions through 2026–27.

The portfolio reflects CAR’s preference for sectors with defensible baselines, tractable measurement and open data. Nitric Acid, ODS and Mine Methane are widely regarded as the strongest next CCP candidates given their high-confidence quantification and close parallels to protocols already reviewed positively elsewhere.

U.S. Forest Protocol — The Integrity Response

No protocol in the CAR portfolio has attracted more scrutiny than the U.S. Forest Project Protocol — and none more clearly illustrates how CAR responds to integrity critique: publicly, through the workgroup process, with revisions visible in the protocol text. It covers three activities on private, tribal and locally-owned US forestland: Improved Forest Management (IFM), Reforestation, and Avoided Conversion.

A 2021 academic critique argued that common-practice baselines drawn from broad supersections were systematically over-crediting projects whose pre-project stocks were already above the regional average. CAR responded through the workgroup process with tighter regional assessment areas, updated growth-and-yield data, revised IFM baselines, stronger additionality tests, better leakage discounting, and refined reversal risk ratings. Successive versions have moved progressively toward CCP category expectations for NBS while preserving backward compatibility.

The key nuance is vintage. Older-version CRTs remain valid on the registry, but buyers focused on CCP eligibility or reputational defensibility increasingly prefer credits issued under the current protocol version — and forward-sale contracts are starting to specify version numbers for delivery.

The Forest Buffer Pool & Reversal Risk

The Forest Buffer Pool is the programme-level backstop against unintentional reversals in Forest, Grassland, Urban Forest and related land-sector projects. Every eligible project contributes a share of its credits to the common pool at issuance; when a verified reversal occurs at any project, pool credits are retired to cover the shortfall, and the buyer’s retirement claim remains intact.

Contribution rates are risk-weighted across four axes: natural disturbance (wildfire, pests, drought, wind), management (silviculture, inventory quality), financial (ownership stability, solvency) and social (tenure disputes, regulatory change). Higher-risk projects pay a larger share, keeping the premium commensurate with exposure.

Climate-driven wildfire risk has put pool adequacy under scrutiny. CAR has responded by strengthening the reversal risk rating methodology, raising contributions in elevated-fire regions, and publishing buffer pool transparency data so buyers and ratings agencies can track inflows, outflows and the current balance.

CORSIA & Host Country Authorization

CAR’s CORSIA infrastructure is built around Section 2.11.2 of the Reserve Offset Program Manual, which governs double-claim avoidance for CORSIA-designated credits. The August 2024 Host Country Authorization memo sets out exactly how CAR handles changes in a host country’s authorization scope or status.

The Reserve continuously monitors Article 6.2 participation and reconciles host-country reporting with registry data. A change can be flagged through three channels: direct host-country notification, developer notification (required by the Attestation of Compliance with Double-Claiming Requirements), or CAR’s own reconciliation.

When a change is detected, CAR notifies the developer, affected credit holders, the host country, UNFCCC and ICAO. If authorization expands, additional credits are tagged CORSIA-eligible after a revised Letter of Authorization is received. If authorization is reduced or revoked, CAR tries to resolve the discrepancy with the host country and proceeds to reconciliation if no resolution is reached within 90 days.

For airlines, CORSIA sourcing from CAR is less about buying a credit and more about buying into an authorization stack that CAR actively monitors and reconciles. That is a feature, not a bug — but buyers should understand the reconciliation waterfall before locking in multi-year offtake. For developers, the Attestation of Compliance with Double-Claiming Requirements creates a binding obligation to notify CAR of authorization changes.

Commercial Implications for Developers & Buyers

For developers, CAR remains the natural home where protocol rigour is the defining commercial requirement: Mexican ejido and community-forest projects (now CCP under Mexico Forest v3.0), US regenerative-agriculture soil projects (CCP under Soil Enrichment v1.1), US forestland managers willing to navigate the updated U.S. Forest Protocol, and North American industrial facilities running nitric acid, mine methane, ODS or landfill gas destruction. The modular framework adds a new lever: multi-country portfolios (e.g. regenerative ag across the US, Mexico and Canada) can extend via Jurisdiction Modules rather than fresh protocols per country.

For buyers, CRTs have three distinguishing attributes. Integrity pricing: Mexico Forest v3.0, U.S. Soil Enrichment v1.1, Nitric Acid, ODS Article 5 and Mine Methane CRTs trade at the upper end of voluntary ranges. Compliance overlap: where an activity is registered as both a CRT and an ARBOC, the compliance price floor provides indirect support. CCP-delivery clauses: forward contracts increasingly specify the protocol version and whether it is CCP-approved — buyers should check both.

The practical read: CAR is a high-integrity, policy-first registry whose 2026 positioning is execution and defensibility, not volume. For portfolios that have to withstand scrutiny from boards, regulators, auditors and NGOs, CRTs earn their place. For buyers chasing the lowest-price spot tonnes, CAR is rarely the right answer.

Frequently Asked Questions

What Project Developers & Buyers Should Do Now

A practical H1 2026 checklist:

• Start the CCP Labeling Request process for any Mexico Forest v3.0 or Soil Enrichment v1.1 project. Determine which Step 1 path applies (no-change, permanence-only, or full re-verification) and engage your original Verification Body early if NOVA/COI is needed.
• Comment on the Modular Protocol Structure memo by 27 April 2026 if your project type is affected. This is the window to shape how the transition applies to your class.
• Plan the 40-year permanence extension for land-sector projects seeking CCP tagging. If it’s the only change, no re-verification is required — coordinate with the Reserve early.
• Verify CORSIA Host Country Letter of Authorization status. Confirm the LOA is on file, the project is on the ICAO eligible-unit list, and Article 6.2 participation is stable. Build the 90-day reconciliation window into offtake planning.
• Confirm your protocol version. Pull the current version in use. Forward contracts are increasingly specifying protocol version by name — it determines both integrity profile and CCP eligibility.
• Engage the public workgroup process. For any new protocol or Jurisdiction Module affecting your project type, workgroup participation is one of the most underused levers.
• Review forward contracts for CCP-delivery clauses. Check that pre-sold CRTs reference the CCP-approved protocol version and that delivery timelines align with the five-step tagging process.