Additionality is an essential determinant of an offset project quality. Additionality is a term by which an assessment is made regarding whether or not a project's emissions reductions are in addition to a business-as-usual scenario. To prove additionality, a project must meet the requirements that demonstrate the project faces barriers to implementation such as it is not required by any law, statute or rule, and it is not common practice in the project area. These barriers can be institutional, technological or financial.

Monitoring and Verification

Emissions reductions from projects must be accurately and conservatively quantified. Each project must have a monitoring plan that defines how, when and by whom the quantification will be done. All emissions reductions must be verified by an independent third party. Furthermore, all reductions must be based on realistic emissions baselines.

Permanence
Offset project emissions reductions and removals must be considered permanent in the context of efforts to stop and reverse climate change. Projects sequestering and storing carbon that can be reversed (re-released into the atmosphere) are subject to long-term contractual obligations with offset registries and contribute offsets to a buffer pool. If reversed, an equivalent amount of offsets will be retired from the buffer pool to ensure greenhouse gas emissions do not increase.

Ownership of Credits
Reductions generated by offset projects must have clear and defensible rights to ownership and may only be allocated, awarded or counted one time, at any given time, against the greenhouse gas emissions of a single entity.

NW Natural uses criteria established by recognized standards, listed above, to ensure that Smart Energy dollars are going to credible projects that have a positive impact on the climate. Smart Energy offset projects must:

• Meet a credible third-party certification body's additionality standard (e.g., Climate Action Reserve, VERRA or American Carbon Registry) that clearly demonstrates how carbon finance helps the project overcome financial, technological or institutional barriers, or how it is not common practice.
• Have a credible monitoring plan in place that quantifies emissions reduction performance and subject it to third-party verification.
• Permanently reduce or avoid emissions.
• Demonstrate clear title to the emission reductions to guarantee that offsets have clear and defensible ownership rights and are not subject to double counting.