Business Model & Financial Transparency

When creating our fee structure, we thought deeply about the incentives behind issuing credits, and how to best align ourselves with the actual climate impact associated with carbon credits. We decided on a simple and straightforward flat rate captured when credits get issued through our platform.

Fee Structure

• There is a 2% fee on the sale of credits through the Open Carbon Protocol.

  • (Fee = 2% *price * #credits sold)

• There are no additional registry platform fees.

• No costs to project developers to write or revise methodologies.

• No additional upfront costs to project developers.

• There is a 2% fee on the sale of credits through the Open Carbon Protocol.

  • (Fee = 2% *price * #credits sold)

• There are no additional registry platform fees.

• No costs to project developers to write or revise methodologies.

• No additional upfront costs to project developers.

• The OCP is a registry. The OCP is not a marketplace, sales platform, or developer. Sales occur via agreements between the project developer and buyer. Credits are issued via our methodology and credit issuance process. How they are sold is the purview of the project developer.

What do the fees cover?

• Expert Review Process: The Open Carbon Protocol pays for expert consultation in developing the methodologies. In doing so, we have no say over whether or not the methodology passes and take on risk of it not passing.

• Fast project development: Because of our external expertise, we can develop multiple methodologies simultaneously so that project developers are able to get their projects off the ground within a couple of months, rather than years.

• High-quality assurance: Project developers can be assured that their projects are created based on scientific peer-reviewed methodologies— signaling a uniquely high degree of integrity.

Why?

• We came to this decision after researching the other registry fee structures, as well as responding to market concerns when it comes to incentives for registries.

• Relying on and paying for external experts to review methodologies proposed on our platform ensures an extra layer of independence. We do not have a say over whether a methodology gets passed, therefore reducing conflict of interest and misaligned incentives.

• The fee based on credit sale links our revenue to the demand for impact.

• Alternative fee structures are often overcomplicated and consist of costly upfront costs that limit the ability for small project developers to get off the ground. The OCP allows for project developers to start issuing credits and reducing carbon faster.

How do credits get priced?

• The project developers price their credits based on market dynamics and their project costs. Some project types will have higher prices due to the technology used.

• The OCP is a registry. The OCP is not a marketplace, sales platform, or developer. Sales occur via agreements between the project developer and buyer. Credits get issued and sold via our methodology and credit issuance process.

In the spirit of aligning incentives, we want to be transparent about how we spend our profits. We are thinking of creative ways to reinvest our profits and communicate transparently how we do so.

• This could take a few different shapes:

  • We purchase a portion of the credits issued through the OCP, and they exist in a pool of credits that we can either add to the OCP ledger or move / control as we see fit.

  • Create a fund structure with excess profits to invest in innovating MRV solutions to cut the costs for project developers.