Reversal & Invalidation Protect

This policy is for carbon credit sellers who want to “wrap” credits with embedded protection at the point of sale, typically project developers, marketplaces, exchanges, and traders. The insurance is priced into the credit and can transfer with the credit to the end buyer, improving liquidity and buyer confidence. Buyers can also purchase cover directly where a wrapped credit is not available.

The insured instrument is the specified carbon credits, identified by registry, project ID, vintage, and serial number range in the policy schedule, plus any linked delivery or sale contract if stated.

We support all major carbon project types, including nature-based and engineered reductions and removals: afforestation, reforestation, improved forest management, avoided deforestation, peatland and mangrove restoration, soil carbon, blue carbon, biochar, enhanced weathering, direct air capture with storage, BECCS, landfill capping and gas capture, wastewater methane, manure management, enteric methane reduction, coal mine methane, oil and gas methane abatement, renewable energy, energy efficiency, fuel switching, clean cooking, industrial gases, refrigerants, cement and steel abatement, and other eligible industrial decarbonisation.

The policy covers credit cancellation due to reversal (carbon is re-released into the atmosphere) or invalidation (the methodology is exposed to errors or fraud). The full list of risks is flexible and detailed in the policy.

Perils include human-induced reversals, natural-catastrophe-related reversals, and invalidation events. Examples of specific covered perils include registry suspension or administrative action, legal title or ownership defects, double counting, fraud or misrepresentation, methodology non-compliance, monitoring and reporting failures, data integrity issues, validation or verification failure, third-party assurance failure, operational contractor error, and delays in verification, issuance, or registry processing. Where relevant, reversal drivers may include wildfire, flood, storm, drought, pest or disease, and third-party damage, subject to policy terms, conditions, and exclusions.

Exclusions include registry collapse in addition to standard exclusions (War, Nuclear, Chemical, Biological, Radiological).

Yes. Core customisations typically include selecting covered perils, setting limits and sub-limits, and choosing the co-insurance structure and attachment points to match the transaction and risk appetite.

The policy is designed to wrap and travel with the credit, making the policyholder the credit-holder. It is typically taken out by the credit seller (whether developer or exchange) and transferred to buyer at the point of purchase.

The insured is the credit holder, whether developer, exchange, or buyer.

The insured interest is the credit-holder’s financial loss when insured credits are cancelled, invalidated, or reversed and must be replaced or compensated, including the defined replacement cost and any covered ancillary costs in the schedule.

Credit cancellation due to any peril (execution, external, timing, jurisdictional) named in the policy. Specific perils include fraud or misrepresentation, double counting or ownership defects, methodology or monitoring and reporting non-compliance, data integrity failures, validation or verification failure, third-party assurance failure, registry suspension or administrative action, operational or contractor error, and, where relevant, physical reversal drivers such as wildfire, flood, storm, drought, pest or disease, and third-party damage, subject to policy terms and exclusions.

A claim is triggered when a relevant registry action removes, cancels, or invalidates the insured credit, and the credit-holder is not reimbursed or made whole through the project developer’s contractual remedies or any applicable registry buffer or reserve mechanism.

The policy pays out the cash value of impaired credits, based on their stated value, enabling buyer or seller to purchase replacement credits.

The credit volume insured, multiplied by the stated value per credit.

Three years from issuance.

The insured submits a claim to Oka with the registry or standard determination, the affected serial numbers, and evidence of loss. If the claimant is the credit buyer, no action is required from the project developer. Oka validates the loss event against the policy schedule and, once agreed, settles the claim in cash in line with the payout basis.