The  2022 ISDA Verified Carbon Credit Transactions Definitions are in the form of a standard definitional  booklet for physically settled secondary market Verified Carbon Credit (VCC) transactions and are accompanied by template confirmations for VCC spot, forward and option transactions. The ISDA VCC Definitions are designed to be incorporated into a confirmation for a physically settled spot, forward or option VCC transaction. Consistent with the approach for other ISDA definitional booklets, this means that different governing laws can be applied whilst the terms of the transaction remain as standardized as possible. The ISDA VCC Definitions are intended to operate as a global document, they are intended to be used by market participants in any region and in respect of VCCs issued by different carbon standards globally. The ISDA VCC Definitions are designed to be used not only as a set of standardized terms as a liquid secondary market continues to develop but also as a means of documenting bespoke transactions. There are a number of elections that parties can make in order to reflect their preferred approach. A number of provisions have been drafted generically, so that the ISDA VCC Definitions are carbon standard and registry agnostic. This means that the ISDA VCC Definitions do not need to be updated when a carbon standard or registry amends its rules. As the ISDA VCC Definitions can be used for physically settled spot, forward and option VCC transactions, the Definitions provide for either physical delivery of VCCs from the Delivering Party’s registry account to the Receiving Party’s registry account; or retirement of the VCCs by the Delivering Party on behalf of the Receiving Party. In light of the carbon and registry agnostic approach taken, the ISDA VCC Definitions ultimately defer to any requirements for delivery or retirement set out in the relevant carbon standard rules and registry rules.

These Definitions are available only by one-year subscription in MyLibrary.

Version 1 of the ISDA VCC Definitions was published on December 13, 2022. Version 2 of the ISDA VCC Definitions was published on February 7, 2024.

FAQs on the Definitions are attached below (updated February 2024).