> For the complete documentation index, see [llms.txt](https://open-carbon-protocol.gitbook.io/ocp-handbook/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://open-carbon-protocol.gitbook.io/ocp-handbook/registry/credit-cancellation.md).

# Credit Cancellation

The permanent removal of a **carbon credit** from the **OCP Registry** without claiming the associated benefit of the reduction/removal for any voluntary or mandatory target. All cancellation are tracked on the OCP Registry. \
\
May occur for a two reasons:

1. Compensating for **reversal events**
2. Compensating for **excess issuance /** **over crediting.**

### Reversal Events

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For more information, see '[Mitigating Risk: Insurance and Buffer Pool](/ocp-handbook/projects/mitigating-reversal-risk-insurance-and-buffer-pool.md)'
{% endhint %}

* All Projects must conduct a permanence & reversal risk assessment, as well as create a risk mitigation strategy, aligned with the '[Permanence](https://open-carbon-protocol.gitbook.io/ocp-methodology-requirements/sections/8.-permanence)' section of the relevant methodology. 
* Project Developers must monitor for reversals as part of their monitoring plan, and are required to notify the program as soon as possible and no later than 5 working days after becoming aware of the reversal event, as per [OCP Terms of Service](https://pilot.ocp.earth/terms-and-conditions). Any single reversal event or cumulative series of reversal events amounting to 5% or more of credited outcomes shall automatically trigger a mitigation response. 
* Project Developers have two possible mitigation responses, if allowed by the relevant methodology:
  * **Buffer Pool Contribution and Distribution**: During each credit issuance, a methodology-dependent percentage of credits is contributed to the [OCP Buffer Pool](#ocp-buffer-pool-policy). 
  * **Project Insurance**: During project proposal, project developers must take out an insurance policy with a registered carbon insurance company (e.g. Kita, Oka). In a reversal event, the insurance company will work with the OCP, buyers and other stakeholders to compensate.

### Excess Issuance / Over Crediting

* In the case of excess issuance / over crediting on an OCP project (including from smart contract, registry or data integrity issues), credits will be permanently cancelled and the OCP will:
  * If the excess issuance / over crediting is identified before credits are first transferred, the credits will be cancelled from the Project Developer's inventory and no further action will be taken.
  * If the excess issuance / over crediting is identified after credits have been transferred or retired, the credit owners can choose either:
    * Replacement credits (at no extra cost) for all credit owners from relevant other projects or issuances (with approval from credit owners) *or*
    * A full monetary refund (based on the original price of sale, with proof of purchase). Any revenue from over-issued credits will be refunded to the relevant party.
* **Replacement credits for excess issuance /** **over crediting will not come out of the** [**OCP Buffer Pool**](/ocp-handbook/projects/mitigating-reversal-risk-insurance-and-buffer-pool.md#ocp-buffer-pool-policy)**, which is reserved for reversal events only.**
  * With prior approval from the Governing Board, replacement credits may be temporarily used from the buffer pool to ensure the platform is operating properly. A 'refilling' plan is required before this action can occur, which is tracked by the governing Board until the buffer pool has been fully replaced by OCP-bought credits.
* In the case of excess issuance of credits due to an error with the OCP platform, the OCP will work with the project developer to cancel and/or issue new credits based on the correct calculation. Any sold credits will be replaced as per the mechanism above.
* The OCP is the responsible entity for managing the excess issuance / over crediting, with final decision making and sign-off by the OCP Advisory Board.
* All relevant parties will be notified within 5 working days via email and will have the opportunity to set up meetings with the OCP team to discuss next steps. All cancellations will also be publicly communicated via the [OCP Registry](https://pilot.ocp.earth/registry) (Activity > Cancellations) and on the relevant project pages.