The Downforce Natural Capital (DNC) Programme is aimed at fostering natural capital improvements and restoration that lead to greenhouse gas (GHG) removals and emissions reductions, biodiversity net gain and increased ecosystem resilience.

As an outcomes-based programme, the DNC Methodologies provide at-scale measurement, ongoing monitoring and verification of below- and above-ground carbon, biodiversity at habitat level and soil moisture for land parcels anywhere in the world. They offer granular data insights on soil organic carbon (SOC) stocks from paddock to farm to portfolio level based on the integration of remote sensing data at 10m x 10m resolution every 10 days from 2017 to the present.

This allows land managers, estates, supply chain companies, retailers and financial institutions to understand how land management practices and climate / seasonable variability impact the land and where interventions may be put in place to enhance long-term carbon removals towards net zero targets.

The DNC Programme is accredited under the International Organization for Standardization (ISO) 14064 Part 2 standard for “Greenhouse gases — Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements”, which provides a framework to enable high-quality, repeatable natural capital projects at any scale, in any jurisdiction.

The DNC Methodology for Quantification, Monitoring and Reporting of Soil Carbon Removals Enhancement (‘SOC Methodology’) is thus an ISO-accredited methodology for measuring, monitoring and verifying soil carbon removals, which aligns with internationally agreed sets of standard concepts, definitions, classifications, accounting rules and tables.

Project Phases

DNC Projects developed under the DNC Programme follow a standard set of phases to appropriately plan and assess whether, where and how the project will be carried out and then to implement the agreed activities aimed at increasing the project area’s natural capital.

Phase 1 – Pre-Feasibility

This phase involves a preliminary assessment of the proposed project area, i.e. Area of Interest, to gauge its eligibility and viability to host a long-term i.e., 50-100 year project compliant with the DNC Programme and the DNC SOC Methodology. All relevant criteria to development of a DNC Project, including the project concept, eligibility and design of the land management or agricultural production system and feasibility for generating soil carbon removals, are assessed to confirm the suitability of the proposed land for potentially hosting a soil carbon project.

Phase 2 – Feasibility

The primary aim of the Feasibility phase is to ensure the project is viable through carrying out of the Feasibility Assessment. Based on consideration of the identified Carbon Estimation Areas (CEAs), which vary in their historical SOC variability and potential SOC attainment (as compared to observed performance by similar land in the same Functional Class (described below)), formally defined project 2 | P a g e area(s) and essential metrics in the DNC Project Plan, which in conjunction with the DNC Project Implementation Guidelines inform the activities to be undertaken throughout the DNC Project. Importantly, this second preliminary phase requires the proposed DNC Project to undergo third-party validation to trigger the implementation phase.

Independent, qualified third-party auditors with ISO 14064 accreditation must validate that the DNC Methodology has been adhered to. Such an external audit aims to strengthen the level of assurance that the project will likely result in soil carbon removals due to the planned interventions and, when taken into consideration with the project-related emissions, overall net carbon removals, i.e. GHG Removals Enhancements.

Phase 3 – Registration

Upon successful audit, the DNC Project is formally registered. The Project Proponent(s) sign the DNC Project Engagement Agreement, whereby they commit to implementing the project with the agreed activities laid out in the Project Plan in accordance with the SOC Methodology, and it sets out the corresponding terms and conditions, obligations, warranties and representations related to the ongoing MRV of the DNC Project.

In order to initiate the DNC Project, a baseline must be established for the AOI against which any changes in SOC stocks may be measured, monitored and verified in conjunction with emissions attributable to the project site for certification and issuance of carbon units. Carbon units are measured as tonnes of carbon dioxide equivalent (CO2e), where one unit is representative of a net removal, or GHG Removal Enhancement, of one tonne of CO2e.

The carbon units that are generated by DNC Projects are known as Downforce Carbon Unit® (DCUs). For each Downforce Carbon Estimation Area (CEA), the number of potential DCUs is determined based on:

1. The baseline SOC or carbon determined by the appropriate DNC Methodology prior to the project commencing

2. The abatement rate calculated by DTL for the Carbon Estimation Area(s) as determined based on the appropriate DNC Methodology for the DNC Project

3. The Maximum Available Carbon Storage observed based on the appropriate DNC Methodology

4. The additionality foreseen under the different Land Management Activities agreed in the DNC Project Plan

For transparency and avoidance of double counting of carbon units that reflect GHG Removals Enhancements, the DCUs generated by a DNC Project will be publicly displayed on the DTL Registry upon request for certification and issuance by the Project Proponent(s).

The amount of DCUs certified and issued will be determined throughout the Monitoring phase. The DCUs will include both those that the DNC Project has available for retirement and those that have already been retired on behalf of a Buyer.

The DTL Registry provides a transparent overview of the chain of custody as to when the DCUs were generated and delivered on to the DTL Registry, what date they were retired and for whom. Within the DTL Registry, buffers will be maintained to mitigate loss or reversals of the carbon removals by the DNC Project. Issuance requested by the Project Proponent(s) will allocate 20% and 5%, respectively, of the DCUs into the DNC Project Carbon Buffer and the DNC Programme Permanence Buffer.

If units are used first from the DNC Project Carbon Buffer and then from the DNC Programme Permanence Buffer to address loss or reversal, as the project continues and GHG Removals Enhancements are obtained for which DCUs may be issued, the buffers must be fully restored with the amount of DCUs used to cover the loss before any issuance of saleable units can occur.

Phase 4 – Monitoring

The purpose of monitoring over the course of the 25-year Commitment Period, during which the Project Proponent(s) actively manage the DNC Project Area to enhance GHG Removals, and the subsequent 25-year Permanence Period, is to periodically quantify the GHG Removals Enhancements generated by the DNC Project.

The process involves annual confirmation by the Project Proponent of their continued implementation of the agreed DNC Project activities in the DNC Project Annual Compliance Statement. Then, Downforce Technologies verifies the accuracy, completeness and transparency of these in the DNC Project Annual Compliance Statement Verification. Quantification of the annual net balance between reported emissions within the DNC Project Area and the monitored GHG Removals are reported in the DNC Project Annual Monitoring Report, which may periodically be validated and verified by an independent, third-party ISO 14064-certified auditor.

The number of DCUs to be certified and issued to the DNC Project is then calculated as a provisional figure in the DNC Project Annual GHG Statement and confirmed after 18 months in the DNC Project Anniversary Statement (in accordance with the SOC Methodology 3-year central moving average, as described below).

Phase 5 – Permanence

At the end of the 25-year Commitment Period, the Project Proponent(s) will submit the various proofs and statements in accordance with the SOC Methodology to complete the Final Project Report documenting the GHG Removals Enhancements achieved by the DNC Project.

The subsequent 25-year Permanence Period requires the Project Proponent(s) to maintain the GHG Removals Enhancements achieved during the Commitment Period in the DNC Project Area. Ongoing monitoring will be periodically performed by DTL to identify any reversals or losses that would need to be covered by the remaining DCUs in the DNC Project Carbon Buffer and the DNC Programme Permanence Buffer.

Risks of reversals or loss of carbon removed throughout the course of the DNC Project implementation include natural disturbances (e.g. flood, fire, drought, pests, disease) and changes in land use and/or management, such as conversion of native grasslands and forest land to cropland. Managing the Project Area to improve soil carbon, through practices such as irrigation, application of organic amendments, cover cropping, minimum tillage, etc., reduces the risk of loss and reversal.

DNC Methodology

The DNC Methodology for Quantification, Monitoring and Reporting of Soil Carbon Removals Enhancement (hereinafter ‘SOC Methodology’) is a GHG emissions removal enhancement methodology that is applicable to projects that introduce sustainable land management practices to enhance soil-based carbon in landscapes where SOC would otherwise have remained constant or decreased in time without the intervention of the project.

The DNC Project SOC Methodology works end-to-end from project description, planning, implementation of activities and monitoring of soil-based carbon, through to the reporting of GHG Removals Enhancements and verification of the amount of carbon (given in units of tonnes CO2e) sequestered. The SOC Methodology is aligned with internationally agreed standards, in particular the GHG Protocol (Land Sector Removals Guidance), Taskforce on Climate-related Financial Disclosures (TCFD) and Science-Based Targets Initiative–Forest, Land and Agriculture (SBTi FLAG), and can be used to generate internationally comparable statistics for Nationally Determined Contributions (NDC) under the 2015 Paris Climate Agreement, and inputs for the System of Environmental Economic Accounting (SEEA) and its Ecosystem Accounting extension (SEEA-EA) as part of the System of National Accounts (SNA).

How does it work?

The SOC Methodology is a completely remote measurement and modelling approach which uses publicly available in situ and earth observation data for assessing changes in soil organic carbon (SOC). It provides consistent, accurate measurements and data at high resolution (10m x 10m, at 10 dayintervals (dekad)) and at scales of up to millions of hectares. The methodology is robust and uses conservative procedures to address long-term variability in soil carbon caused by climate change events, such as droughts, fires and floods, to ensure that GHG removal enhancements are not overestimated.

The SOC Methodology generates data and information for two GHG Baseline Scenarios. The DNC Project Baseline is calculated as the historical average of the soil carbon stocks for a production system with an eligible set of one or more additional practices and provides a baseline against which to monitor GHG Removals Enhancements. The DNC SOC Resilience Baseline is the lowest historical annual average soil organic carbon stock measured, which provides a reference level against which to assess future risks of potential uncontrollable reversals.

The SOC Methodology provides quantification of outcomes of soil carbon removals enhancement; it is not a counterfactual methodology, i.e., estimating what would have happened if a policy or activity does not take place. The SOC Methodology removal accounting is based on sink processes and storage in carbon pools (including biomass, dead organic matter and soil carbon pools) in the land-based reservoir. The biogenic sinks remove CO2 from the atmosphere primarily via photosynthesis and microbial and fungal growth. The storage process is through land management where net removals result from annual net increases to carbon stored in land-based carbon pools. All land management net removals are from biogenic sinks. Stock-change accounting refers to the net fluxes of carbon to and from the atmosphere based on the overall change in carbon stocks in a carbon cycle pathway. This accounting approach focuses on the carbon in reservoirs/pools and can be used to account for net emissions and/or removals from carbon pools. The SOC Methodology as applied to the input accounting category is focussed on carbon dioxide (CO2) removals from land management reported in units of metric tonnes and tonnes of carbon dioxide equivalent (converted from carbon (tonnes)).

The SOC Methodology additionally reduces the risk of overestimation of carbon removals attributable to the DNC Project by basing the baseline on historical change over more than 7 years and quantifying GHG SOC Removals Enhancements on the basis of outcomes and net stock changes rather than using projected values. This contributes to the GHG inventory accounting procedure, which reflects the direct GHG emissions from operations (Scope 1) and indirect GHG emissions associated with value chains (Scope 2 and Scope 3), as well as CO2 removals. GHG inventories enable entities to account for and track changes in GHG emissions and removals so that they can manage and reduce net GHG Emissions over time. GHG inventory accounting provides a complete assessment of the annual emissions from sources and removals by sinks, where applicable, within the reporting entity’s inventory system. This includes direct and indirect activities, where progress is tracked relative to a historic base year or period.

The GHG SOC Removals Enhancements from a DNC Project activity are calculated retrospectively as a 3-year central mean average of the net stock change compared to the DNC Project Baseline. This approach reduces the risk of under- or overestimating the change. By basing the calculations on observed changes over a three-year period rather than on a single year or on a projected trend for removals at the end of the project, the SOC Methodology can also track the effects of external drivers, such a climate and extreme events, on changes in soil organic carbon fluxes.

SOC Methodology applied in the DNC Project phases

The SOC Methodology is a remote measurement and modelling approach to quantifying SOC Removals, using a range of data sources covering key parameters that affect soil organic carbon. It includes methods to verify evidence of activities and land use to minimise the risk of false declarations and to produce an annual GHG statement for specific areas and associated production system. The scalable nature of the SOC Methodology provides opportunities for small-scale farmers and very largescale project areas of several hundred thousand or even millions of hectares in size to be considered for a GHG soil organic carbon removals enhancement project. To ensure consistency from year to year, an annual cycle of meetings and monitoring is used to ensure that activities and changes are discussed, documented and verified.

Planning begins with the Pre-Feasibility and Feasibility phases, whereby the DNC Project Feasibility Assessment is produced using the SOC Methodology to quantify the historical soil organic carbon storage in an Area of Interest. The results of the Feasibility Assessment are used to develop the DNC project applying the SOC Methodology, which is applied to:

Confirm the eligibility of the project

Evaluate the expected GHG SOC Removals Enhancement outcomes of the proposed activities

Identify and select the GHG sources, sinks and reservoirs relevant for the project

Determine the DNC baseline, base year, maximum Removals Enhancement as a target, Commitment Period and Permanence Period.

Following Registration of the DNC Project, the Monitoring phase includes the annual assessment, verification and quantification of the DNC Project activities and outcomes with the DNC Project Annual Compliance Statement, the DNC Project Annual Compliance Statement Verification, the DNC Project Annual GHG Statement and the DNC Project Annual Monitoring Report. The SOC Methodology assesses GHG Removals Enhancements through a covariate analysis of factors related to SOC and sequestration processes by integrating millions of data points about historical variability and observed SOC levels within the DNC Project Area’s Functional Classes, which informs the DNC SOC Realisable Potential or SOC potential increase for the DNC Project Area.

DNC Functional Classes are patented categorisations of each 10m x 10m grid square (pixel) in the Project Area and surrounding Region of Influence by factors such as soil characteristics, climatology, biome, land use, etc. Every five years the key parameters used in the SOC Methodology are tested for significance differences using t-tests and any calculations updated to increase accuracy and reduce uncertainties.