Additionality
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 & 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 projects must permanently avoid or displace emissions, rather than temporarily sequestering emissions. Offset registries require projects that have a risk of reversal to contribute offsets to a buffer pool. In the event of a reversal, offsets are retired from the buffer pool to ensure greenhouse gas emissions did 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.

Type:

NW Natural purchases offsets from five high-quality project types on behalf of Smart Energy participants. Here they are in order of preference:

1. Dairy manure methane capture
Anaerobic digestion captures the methane, and the resulting biogas is used as renewable energy.

2. Organic waste methane capture
Anaerobic digestion captures the methane, and the resulting biogas is used as renewable energy.

3. Wastewater methane capture
Anaerobic digestion captures the methane, and the resulting biogas is used as renewable energy.

4. Landfill gas methane capture
The resulting biogas is used as renewable energy.

5. Forestry
The CO_2e emissions that are avoided or newly stored through Improved Forest Management (IFM), Afforestation/Reforestation (A/R), or Avoided Conversion (AC).

Geography

NW Natural and Climate Trust identified two geographical regions for project locations:

1. Pacific Northwest (PNW)
Projects located in Idaho, Oregon,and Washington, with a state order of preference of Oregon, Washington and then Idaho.

2. West
Projects located in California, Montana, Nevada, Utah and British Columbia (Canada).

The Climate Trust^® employs the following criteria 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.