Insurer Kita to help manage OxCarbon’s buffer pool

Specialist carbon insurance company, Kita has agreed to provide advanced management of non-for-profit and UK-based carbon standard, OxCarbon’s buffer pool.

Through its ‘Buffer as a Service’ product, Kita will reduce risk for OxCarbon by employing active risk management for the OxCarbon buffer, with project-specific risk assessment based on insurance-driven technical underwriting criteria.

Operating a buffer is the established way for a carbon standard to demonstrate and maintain integrity in today’s Voluntary Carbon Market – which gives companies, NPOs, governments, and individuals the opportunity to buy and sell carbon offset credits.

The buffer is a central pool of carbon credits to which each project developer is required to individually contribute, and these credits are not allowed to be sold.

Buffers are intended to ensure the integrity of the carbon scheme, regarding permanence and performance. However, risk per carbon project is variable, which can cause challenges when assessing the level of contribution required per project developer, experts explain.

Kita’s buffer management product helps to strengthen buffer integrity and reduce conflicts of interest, through third party administration by a regulated entity; it also helps to enable smarter buffer contributions for high-quality project developers.

Additionally, Buffer as a Service’ also facilitates compliance with evolving requirements within the VCM and wider regulatory bodies.

“Kita is proud to partner with OxCarbon on Buffer as a Service. The risk management expertise of Kita, driven by technical insurance underwriting, combined with the transparent and scientific best practice approach developed by OxCarbon, will reduce risk and increase integrity in the management of the OxCarbon buffer; acting as a badge of confidence for scaling financial investment into the high-quality carbon projects we need to fight the climate crisis,” Dr Paul Young, CTO and co-founder, Kita, commented.

OxCarbon and partnership follows on from their 2023 MOU to collaborate in facilitating the scale-up of financial investment into climate impact projects through scientific and data-driven approaches.

Kita’s ‘Buffer as a Service’ builds on key aspects of that agreement, such as working together to ensure the data provision and ongoing processes related to Measurement, Reporting and Verification (MRV) are transparent and comprehensive enough to enable development of viable risk management solutions for OxCarbon and its projects.

Stephen Lezak, OxCarbon Carbon Accounting Lead, said: “Carbon markets can only benefit from subjecting projects to the professional scrutiny and risk-assessment process of companies such as Kita.

“Flat or generically assessed risk contributions to determine how many carbon credits a carbon project contributes to a Carbon Standard’s buffer penalises the best projects, reducing profitability at a critical stage. OxCarbon working with Kita can enable smarter buffer contributions while staying compliant with evolving requirements within the VCM and wider regulatory bodies.”

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