Verra Launches Version 5 of the VCS Program

To increase program integrity, version 5 of the VCS Program introduces the following:

• A pilot for innovative approaches to managing non-permanence risk: In recognition of evolving market interest, this pilot enables project proponents to use insurance or fund-based approaches as alternatives to the pooled buffer to address non-permanence risk. See the announcement on the launch of this pilot for more information.
• A shift from implied ownership to substantiated right to operate and right to reductions and removals: Version 5 provides greater clarity around project rights and claims to reductions and removals. It replaces “project ownership” with “right to operate” and clarifies that all project proponents must analyze the applicable context to substantiate their right to operate a project and to claim reductions and removals. Where land or resource rights may be affected, VCS Version 5 introduces a complementary analysis to identify potential overlapping or competing claims and to assess whether additional measures—such as a free, prior, and informed consent (FPIC) process—are needed to demonstrate right to operate.
• A higher bar for stakeholder engagement and safeguards: The updates raise expectations for stakeholder engagement, safeguards, and governance. They strengthen early engagement and consultation requirements and reinforce FPIC for customary rights holders and Indigenous Peoples. Beyond requiring a risk assessment, projects must now assess the precise level of risk and design mitigation measures commensurate with the greatest potential impacts—sharpening focus on the most material risks. Enhanced safeguards requirements improve transparency, accountability, and protections for communities and the environment, supporting more robust and durable climate action.
• Requirements that advance financial transparency and fair benefit sharing: VCS Version 5 takes a step toward greater financial transparency, focusing on those entitled to fair compensation. Projects affecting land or resource rights or involving Indigenous Peoples were already required to have a benefit-sharing mechanism; however, the updated requirements clarify that the mechanism must be jointly designed, based on clear and upfront financial information, and in place before the project starts.
• Updates to balance stability and methodological rigor: This revision provides projects with greater certainty over shorter crediting periods, while requiring more frequent baseline reassessments and updates to the latest methodology versions.
• Clarifications on crediting start dates: This update includes clearer definitions for project and initial crediting period start dates to ensure projects can confidently establish when crediting eligibility begins.

To enhance program accessibility and usability, version 5 of the VCS Program introduces the following:

• Emphasis on a digital approach: All projects that use methodologies available in digital format must undergo digital registration and verification processes to streamline data collection and project reviews, and to increase transparency.
• An updated project classification system: The new system provides a clear framework for sectoral scopes, project categories, and project activity types. This system aligns with other market frameworks, including those used by ratings agencies, and provides greater clarity on the competencies that validation/verification bodies (VVBs) need to audit different project types under each sectoral scope.

To refine the program scope for maximum impact, version 5 of the VCS Program introduces the following:

• New sectoral scopes: New scopes for Oceans and Marine Resources and Engineered Removals will enable more climate action in these emerging sectors.
• An update that results in geographic eligibility being specified at the methodology level: For grid-connected renewable energy in particular, this change will enable more specific criteria for whether such projects are considered additional to be included in the relevant methodologies.
• Retirement of the concept of Approved Greenhouse Gas (GHG) Programs: Going forward, all projects need to meet the VCS Program’s rigorous requirements, including those previously registered in another GHG program.