Introduction to the Improved Forest Management on Private Land federal offset protocol

Introduction

The Improved Forest Management on Private Land federal offset protocol (the Protocol) was published under the Canadian Greenhouse Gas Offset Credit Regulations (the Regulations) that establish Canada’s Greenhouse Gas (GHG) Offset Credit System. The Protocol incentivizes climate action by enabling projects that increase forest carbon storage through changes in forest management practices to generate federal offset credits provided that all requirements under the Regulations and the Protocol are met.

This document is intended for project proponents and other parties involved in developing or implementing projects following the Protocol, such as forest operators, Indigenous governments and organizations, landowners, consultants, and verification bodies. The document provides clarification, explanation, and contextual information on some of the basic elements of the Protocol to help potential users of the Protocol understand and apply them. It is not a summary or overview of the Protocol, nor is it a free-standing document; it is meant to be used alongside the Protocol and the Regulations.

The information contained in this document does not supersede or modify the requirements set out in the Regulations or the Protocol, nor does it constitute legal advice or interpretation. In the event of any inconsistency between this document and the Regulations or the Protocol, the Regulations or the Protocol take precedence.

Overview of improved forest management

Under the Protocol, improved forest management (IFM) refers to carrying out various forest management practices that can increase the amount of carbon stored in forests. These activities result in GHG removals from the atmosphere and help mitigate climate change.

IFM is about how forests are managed

IFM requires purposeful changes to current or planned forest management activities that result in greater carbon storage over time. Examples to changes in management could include shifting from clearcutting to partial cutting, extending rotation lengths, or transitioning from timber harvest to no harvest. An IFM project that continues the same forest management – meaning the same practices as before the project – would have no additional benefit for climate change.

Conservation-based practices, such as reducing or suspending harvests, are considered IFM if they represent a change compared to what would have happened without the IFM project. For example, if a forest was regularly harvested in the past and the offset project involves a shift to long-term conservation, this would qualify as IFM. However, simply maintaining an existing conservation-based forest management approach, such as continuing to implement a long-standing conservation easement, would not have any additional climate benefit because there is no change in forest management and this conservation would have occurred without the IFM project. Requiring actual changes in forest management relative to what would have happened without an IFM project (i.e., the baseline scenario), through improved harvest practices or through conservation, ensures that offset credits represent real climate benefits.

It is important to note that projects located on lands that have not previously – or recently (e.g., within the last 30 years) – been actively managed may still be eligible under the Protocol. If it can be demonstrated that, in the absence of the project, forest management would have occurred at some point during the crediting period (i.e., the period for which offset credits can be issued), the project may still be considered IFM provided that all other requirements are met.

Eligible IFM practices

The Protocol does not contain an exclusive list of eligible project activities. Rather, any forest management activity that increases carbon storage compared to what would have happened without the IFM project is eligible, noting some project activities identified in the Protocol are ineligible^{Footnote 1} .

The Protocol supports project activities that involve:

• Changes to forest management practices that increase or maintain onsite carbon storage (e.g., lengthening harvest rotations, reducing harvest intensity, or implementing partial cutting instead of clearcutting), and
• Silvicultural improvements that accelerate forest growth (e.g., improved regeneration techniques, thinning, or planting of genetically improved stock)

For an IFM project to be eligible, these project activities must be carried out on lands that:

• Meet the Protocol’s definitions for ‘’forestland’’ and ‘’private land’’
• Are able to be managed for timber production or other forest products
• Are capable of sustainable forest management, and
• Are not already conserved under a conservation mechanism, such as a conservation easement, unless the land was conserved less than one year prior to undertaking the IFM project

Generating offset credits under the Protocol

Projects that follow the Protocol can generate offset credits by demonstrating that their forest management practices result in greater carbon storage than what would have happened in the absence of the project provided that all other requirements are met. This comparison is made against a reference point known as the baseline scenario, which reflects the forest management that would have taken place without the project.

The difference in carbon storage between what actually happens under the project and what would have happened in the baseline scenario determines how many offset credits a project generates. Only GHG removals from forest management activities that go beyond the baseline scenario can be credited, ensuring that offset credits represent real, additional climate benefits.

To determine the GHG removals and resulting number of offset credits, the baseline carbon storage and the project carbon storage need to be calculated using the methods in the Protocol. The calculations must be supported by records and other evidence. For the project, sample measurements of the forest will need to be taken to determine how much the forest is growing. For the baseline scenario, models will have to be used to estimate how the forest would have changed without the project; this must also be supported by records and other evidence.

Deductions will be applied to the total GHG removals achieved by the project to account for the risk that stored carbon could be released back into the atmosphere, for example due to wildfires or pest outbreaks. In some cases, further deductions may also be applied to account for increases in GHG emissions inside and outside the project site because of the project.

Parties involved in an IFM project

Various individuals or organizations can be involved in developing, implementing, and verifying an IFM project. They include:

• Proponent (or project proponent) – Every IFM project must have a proponent. This is the individual or organization responsible for registering and implementing the project and ensuring compliance with the Regulations and the Protocol
• Forest operator – The party responsible for carrying out the forest management activities within the project site. This could be the landowner, a forest company, land trust, municipal government, community organization, First Nation, or others. On land where a First Nation has exclusive use and occupation, the forest operator is the First Nation
• Registered Professional Forester (RPF) – In many provinces, forest management planning and implementation must be overseen or approved by an RPF. RPFs help ensure that forest management activities are consistent with best practices and professional standards. In some cases, the Protocol requires expert opinion from RPFs or professionals who hold similar expertise and qualifications
• Verification body – An accredited, third-party organization contracted by the proponent to assess whether the project meets the requirements of the Regulations and the Protocol. Individuals within the verification body who carry out this assessment are referred to as verifiers. They review project documentation, may visit the project site, and issue verification statements regarding the project’s compliance

The roles and relationships between parties can vary depending on the project structure, land tenure, and forest management structure. In some cases, the forest operator and the proponent are the same entity. However, they are often different because the forest operator may not have the technical expertise or interest to lead an offset project and may instead partner with another party. In such cases, a formal agreement or partnership is typically established to facilitate the IFM project and set the terms of collaboration between the parties. This would include an authorization from the forest operator for the proponent to implement the project on land managed by the forest operator. In cases where the proponent is not the forest operator and the forest operator is not the landowner, the proponent would also need an authorization from the landowner.

In some cases, proponents work with consultants who provide specialized expertise and assist with project design, quantification of GHG removals, and project documentation. However, proponents may have the necessary expertise to carry out these tasks without external support.

Where this Protocol applies

The Protocol only applies to projects taking place on private land. Private land, as defined in the Protocol, means land where ownership is held either in fee simple (or fee simple equivalent), or where the forest operator has exclusive use and occupation and legal authority to make long-term forest management decisions. This definition excludes provincial and federal Crown land and public land in the territories, but includes land where a First Nation has exclusive use and occupation.

This includes but is not limited to:

• Privately owned land (fee simple or equivalent)
• Municipal land, where the municipality has exclusive authority to make decisions about forest management
• Indigenous-controlled land, where a First Nation or Indigenous government holds exclusive use and occupation. This may include:
  • Reserve land
  • Treaty Land Entitlement land with an exclusive use permit
  • Settlement land under modern treaties

In addition, to be eligible under the protocol, IFM projects must take place on private land that meets the definition of forestland. Forestland is defined in the Protocol as “treed areas that are at least 1 hectare in size with tree crown cover of at least 10 percent, and with trees that can reach a minimum height of 5 metres at maturity in situ.” In plain terms, this means that individual trees or small groups of trees, such as those in a backyard or along a fence line, would not meet the definition of forestland under this Protocol.

Land that does not meet the definition of forestland at the start of the project but is capable of meeting the definition over time through regular planting or natural regeneration also qualifies as forestland. For example, lands that have been recently harvested may not meet the required crown cover or height thresholds at the beginning of an IFM project, but these lands can be included in the project site if they are expected to regrow and meet the forestland definition during the project. In contrast, lands that have remained permanently non-forested before the project started – such as agricultural fields, developed areas, or naturally treeless ecosystems – are excluded.

What is not covered by IFM

There are other common forest-based climate mitigation activities that do not fall under the umbrella of IFM. These includes:

• Afforestation/reforestation, where forestland is established (i.e., afforestation) or re-established (i.e., reforestation) on lands that are not currently forested
• Avoided conversion of forestlands, where the goal of the project is to prevent deforestation or land-use change, and
• Avoidance of natural disturbance, where mitigation measures are implemented to prevent GHG emissions from potential natural disturbances in the future, such as wildfires

Although afforestation/reforestation and avoided conversion are valuable climate mitigation activities, they are excluded from this Protocol because their carbon benefits result from establishing or preserving forest cover — not from changing how existing forests are managed to increase carbon storage.

Additionally, avoided natural disturbance is ineligible as Canada’s GHG Offset Credit System only credits GHG removals after they have occurred. If these removals are never realized, it would result in over-crediting. Natural disturbance events are highly uncertain, and it is difficult to estimate their magnitude, frequency, and severity with confidence over long time periods. While avoidance of natural disturbance is not directly credited, the Protocol encourages forest management practices that promote ecosystem resilience to reduce the impact of natural disturbances within the project site. Proponents are required to ensure there are environmental safeguards related to maintaining or enhancing ecosystem resilience, where relevant. Projects that implement practices to improve resilience may benefit from decreased deductions to their credits, compared to projects that do not.

Alignment with the United Nations Declaration on the Rights of Indigenous Peoples Act

The federal offset protocol development process acknowledges Canada's commitment to respect and promote the inherent rights of Indigenous peoples and affirm the constitutional protection of Aboriginal and treaty rights. While the Protocol is technical in nature, it was designed to reflect the United Nations Declaration on the Rights of Indigenous Peoples Act’s principles of:

• Self-determination in forest management for Indigenous rights-holders
• Respect for Indigenous governance systems, including the use of traditional land use and management plans to inform baselines
• Flexibility in record keeping, recognizing that some evidence for baseline development may be oral or community-based knowledge, rather than written records
• Facilitating participation, ensuring Indigenous forest operators on Indigenous controlled land such as First Nation reserves, Indigenous owned land, settlement lands, and Treaty Land Entitlement land with an exclusive use permit can participate, and
• Additional support, such as reduced contributions to the environmental integrity account for projects classified as Indigenous-led or that involve Indigenous communities

These elements support opportunities for Indigenous communities to participate in and benefit from forest carbon projects.