Verra has set the criteria for insurance products intended to cover carbon credits from 2021 onward, where both the host country and the aircraft operator might claim the same emission reductions (double claiming).

When the insurance is in place, these credits can be used under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and will carry a CORSIA label in the Verra Registry.

  1. Insurance products must cover an undertaking by the issuer to provide one of the following:
    • Verified Carbon Units (VCUs), or other CORSIA Eligible Emissions Units (EEUs) issued by a crediting program approved by Verra, for cancellation that are eligible for the CORSIA compliance period in which the original VCUs are retired without corresponding adjustment, equal to the number of affected VCUs
    • A payment sufficient to procure the amount of VCUs or other EEUs described in 1(a) above for cancellation, with a suitable mechanism to monitor relevant credit prices and adjust the insured amount as needed, for example where the required payment diverges by [15%] or more of the insured amount already covered
  2. Insurance products must be capable of being triggered upon the occurrence of any event that would give Verra grounds under its CORSIA Label Guidance to determine that compensation must be provided upon Verra’s demand.
  3. Insurance products must be valid or extendable until at least two years after the applicable deadline for the host country to submit its biennial transparency report (BTR) under Article 13 of the Paris Agreement following the first transfer event of the relevant VCUs.
  4. The insurance must enable or undertake the cancellation described in criterion 1 in any event that the policy holder is unable to receive VCUs/EEUs and/or undertake the cancellation, for example, through appointing a third-party administrator to perform the cancellation.
  5. Verra must not become liable under any circumstances for the costs of obtaining or maintaining the insurance or undertaking the cancellation of VCUs/EEUs.
  6. The insurance provider must be sufficiently creditworthy with a high credit rating and must be unaffiliated with the host country or project proponent. Insurance providers owned or controlled by, or sharing a credit rating with, the host country or project proponent are not eligible.
  7. The insurance provider must enter an information sharing agreement with Verra committing to periodically provide information to be agreed upon, and amended from time to time, regarding at minimum, the following:
    • A list of all VCUs covered by each insurance product and all relevant terms of such coverage, including the term of the insurance, insured amount per VCU for insurance products that provide a financial payment, etc.
    • Timely notification of any change or lapse in coverage
    • Timely notification of any claim made for VCUs/EEUs covered under the insurance

Eligible insurance products include those provided by private firms, civil society organizations, or other organizations. Guarantees provided by the Multilateral Investment Guarantee Agency (MIGA) shall be assessed for equivalence with Verra’s CORSIA insurance criteria.

For VCUs from 2021 onward to receive a CORSIA-eligible label in the VCS Program, they must have received an Article 6 label, which indicates a host country has authorized these credits for a specific use under Article 6 of the Paris Agreement. In addition, they must also demonstrate one of the following:

  1. A completed corresponding adjustment for the mitigation outcomes represented by the respective VCUs; or
  2. A CORSIA Accounting Representation (forthcoming) signed by an entity that commits to compensate for any VCUs affected by double claiming, along with a certificate of insurance for a Verra-approved insurance product.

As a next step, Verra will contract an insurance specialist who will assess whether insurance products meet these criteria and, following that, publish a list of eligible insurance products. The insurance criteria are subject to revision through this assessment process.

This insurance pathway reflects Verra’s ongoing commitment to help voluntary and compliance with carbon markets grow with integrity.

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