December 23, 2021

DENR ADMINISTRATIVE ORDER NO. 2021-43

SUBJECT : Guidelines on the Establishment of the Carbon Accounting,

Pursuant to Presidential Decree (PD) No. 705, as amended or the "Revised Forestry
Code of the Philippines," Executive Order (EO) No. 192, Series of 1987, otherwise known as
the Reorganization Act of the DENR, Republic Act (RA) No. 9729 or the "Climate Change
Act of 2009," EO No. 26, S. 2011, otherwise known as the National Greening Program, and
EO No. 193, S. 2015, otherwise known as "Expanding the Coverage of the National
Greening Program (NGP)," this Order is hereby issued to establish the CAVCS in order to
enhance forest carbon stocks and/or reduce emissions from forests in preparation for the
development of carbon markets, with greater participation from the private sector,
government entities, and upland organizations.
SECTION 1. Basic Policies. — It is the policy of the State to protect and advance
the right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature and to enjoin the participation of national and local governments,
businesses, non-government organizations, local communities and the public to prevent
and reduce the adverse impacts of climate change and at the same time, maximize the
benefits from climate change mitigation and adaptation actions.
SECTION 2. Objectives. — The general objective of this Order is to establish a
carbon accounting, verification, and certification system for forest carbon projects to
encourage and support investments in activities that sequester carbon dioxide and avoid
emissions from deforestation and forest degradation. Specifically, the CAVCS aims to:
a. Incentivize and recognize the efforts of the private sector, upland
organizations, and other entities in forest protection and afforestation,
reforestation, and other restoration activities through the provision of verified
carbon certificates;
b. Contribute to climate change mitigation efforts by reducing carbon emissions
and increasing sequestration of carbon dioxide from the atmosphere;
c. Provide standardized guidance for monitoring, measurement, carbon
accounting, and verification of forest carbon projects; and
d. Establish a registry for all forest carbon projects undertaken within the
Philippines.
SECTION 3. Coverage. — This Order shall cover forest carbon projects established
in forest lands, ancestral domain areas, private lands, and protected areas.
SECTION 4. Definition of Terms . — As used in, and for the purpose of this Order,
the following terms and phrases shall be understood to mean:
a. Additionality — the concept that credited emission reductions and removals
must exceed, or be additional to, what would have been achieved under the
business-as-usual scenario.
b. Afforestation, reforestation, and restoration activities (ARR) — are
activities that increase carbon stocks in woody biomass (and in some cases
soils) by establishing, increasing and/or restoring forest cover.
• Afforestation is establishing forests on lands that are not previously
forested.
• Reforestation is the re-establishment of forests through planting and/or
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 deliberate seeding on lands that were previously forested. Species used in
reforestation may or may not be the same species that used to thrive in
the area.
• Restoration is establishing forests in deforested or degraded lands with
conscious intent to recreate a forest ecosystem that closely resembles its
original state. Indigenous species are used in forest restoration.
• Assisted Natural Regeneration is the process of rehabilitating denuded
forest lands by taking advantage of trees already growing in the area.
c. Ancestral domain — forestlands delineated under a claim of ownership,
occupied or possessed by ICCs/IPs under IPRA and evidenced by a duly issued
certificate of claim or title.
d. Avoided Emissions — carbon dioxide emissions that are avoided from
deforestation and forest degradation as a result of the activities implemented
as part of the forest carbon project.
e. Carbon Sequestration — the process of increasing the carbon content of a
carbon pool other than the atmosphere.
f. Carbon Sink — a pool that absorbs more carbon than it releases.
g. Carbon Pool — a reservoir of carbon which has the capacity to accumulate or
release carbon.
h. Certificate of Carbon Sequestered (CCS) — a certificate issued by the
DENR, signifying the amount of carbon dioxide sequestered or greenhouse
gases (GHG) removed by a Forest Carbon Project, measured in metric tons of
carbon dioxide equivalent (tCO 2e). A CCS is valid for five years. The CCS shall
be revalidated every five years and its corresponding amount of carbon dioxide
sequestered adjusted subject to submission, verification, and approval of FCAR.
i. Certificate of Emissions Avoided (CEA) — a certificate issued by the DENR,
signifying the amount of carbon emissions avoided by a Forest Carbon Project,
measured in metric tons of carbon dioxide equivalent (tCO2e). CEAs are valid for
five years. The CEA shall be revalidated every five years and its corresponding
amount of carbon dioxide emissions avoided adjusted subject to submission,
verification, and approval of FCAR.
j. Certificate of Existing Carbon Stock (CECS) — a certificate issued by
DENR, to CAVCS applicants in an area within public and private lands, signifying
the amount of baseline carbon stock protected by a Forest Carbon Project,
measured in metric tons of carbon dioxide equivalent (tCO2e).
k. Department of Trade and Industry-Philippine Accreditation Bureau
(DTI-PAB) — the national accreditation body of the Philippines to accredit
inspection, testing and certifying bodies, and other bodies offering conformity
assessment services.
l. Forest Carbon Assessment Report (FCAR) — a report submitted by the
proponent to the DENR Regional Office that describes all the data and
information related to the monitoring of GHG emission reductions, carbon
sequestration, and the protection of carbon stocks. The template is attached as
Annex 1.
m. Forest Carbon Project Plan (FCPP) — a report that includes pertinent
information on the forest carbon project. The project plan shall include the area
being applied for, investors or companies involved in the project, specific
activities to be undertaken, implementation timeline, quantification of emission
reductions and removals for the business-as-usual and project scenarios, and
leakage management measures. The template is attached as Annex 2.
n. Forest Carbon Project — are implemented to accelerate the rehabilitation
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 and reforestation of unproductive, denuded, and degraded forestlands, and/or
protect existing forested areas from degradation and deforestation. Forest
Carbon Projects under the CAVCS involves activities that either sequester
carbon, avoid emissions, or both.
o. Forest Carbon Stock — is the amount of carbon that has been sequestered
from the atmosphere and is now stored within the forest ecosystem, mainly
within living biomass and soil and to a lesser extent, in dead wood and litter.
p. Forest Protection (FP) — identification and taking actions on threats on
forests to reduce deforestation or degradation and thereby increase and/or
maintain carbon stocks and avoid GHG emissions.
q. Forest Lands — includes public forest, permanent forest or forest reserves,
and forest reservations.
r. Leakage — the geographical displacement of greenhouse gas emissions from
inside the Project Area to outside the Project Area that occurs because of a
forest carbon project. For example, if fuelwood removals are banned inside the
project area, local communities may increase removals in areas adjacent to the
project area thereby shifting emissions outside the boundary of the Forest
Carbon Project.
s. Permanence — longevity of a carbon pool and the stability of its carbon
stocks.
t. Private lands — any land belonging to any private person or group of persons
or juridical entity by virtue of statutory and/or customary laws including tax-
declared alienable and disposable lands, judicial title, original certificate of title,
transfer certificate of title, or Certificate of Land Ownership Award.
u. Protected Areas — an identified portion of land and water set aside by
reason of their unique physical and biological significance, managed to
enhance biological diversity and protected against destructive human
exploitation.
v. Validation — a systematic, independent, and documented process for the
evaluation of a carbon assertion in a CAVCS FCPP against the criteria set out in
the CAVCS Manuals to determine if the project plan conforms to the agreed
criteria, and its implementation can be expected to result in the proposed
carbon sequestration and emissions avoidance as described in the project plan.
w. Verification — a systematic, independent, and documented process for the
evaluation of a carbon assertion in a CAVCS FCAR against the criteria set out in
the CAVCS Manuals to determine if the project plan conforms to the agreed
criteria.
SECTION 5. Principles of CAVCS . — The CAVCS adheres to the basic principles for
greenhouse gas accounting, monitoring, and verification, as established in the Philippine
National Standard (PNS) ISO 14064-2:2011, PNS ISO 14064-3:2011, and the
Intergovernmental Panel on Climate Change (IPCC) Good Practice Guidance for Land Use,
Land-Use Change and Forestry. Forest carbon projects recognized under the CAVCS shall
meet the following principles:
Real: All carbon sequestration and avoided emissions must be proven to have taken
place and shall only be recognized by CAVCS after they have occurred. The effects of a
project on GHG emissions must be assessed and managed, including unintended effects
such as "leakage."
Measurable: Carbon sequestration and avoided emissions must be quantifiable
against an identifiable baseline, using recognized measurement methods and tools.
Additional: Carbon sequestration and avoided emissions must be additional to what
would have happened under a business-as-usual scenario if the project had not been
carried out.
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 Permanent: Where Forest carbon projects carry a risk of reversibility, adequate
safeguards must be in place to ensure that the risk of reversal is minimized and that,
should any reversals occur, a mechanism is in place to adjust subsequent estimates of
carbon sequestration and avoided emissions.
Verifiable: Carbon sequestration and avoided emissions must result from activities
that have been verified on an ex-post basis. Verification requires third-party review of
monitoring data for a project to ensure the data are complete and accurate.
Participating entities and individuals can use the CAVCS to demonstrate their
commitment to forest protection, afforestation, reforestation, and restoration, meet carbon
neutrality goals, and report on GHG mitigation and/or corporate sustainability. In addition,
recognized Forest Carbon Projects should be consistent with national environment and
natural resources laws.
SECTION 6. Qualifications. — Qualified applicants for the CAVCS shall include the
following:
6.1 Filipino citizens of legal age at the time of the filing of the application;
6.2 Corporations, partnerships, organizations, and other juridical entities duly
registered under Philippine laws;
6.3 International corporations registered under the Philippine Securities and
Exchange Commission.
SECTION 7. Application Requirements . — Applicants shall submit to the DENR
Regional Office concerned, the following documents, together with a letter of intent
(template attached as Annex 3):
a. A concept note for the project (template attached as Annex 4);
b. Proof of the Project Proponent's identity such as, but not limited to, articles of
incorporation or Securities and Exchange Commission registration;
c. Proof of operational control of the project area for the duration of the project:
i. a tenure instrument or any management arrangement with the DENR,
SUCs, or another government entity.
ii. certified true copy of the Original Certificate of Title or the Transfer
Certificate of Title.
In cases where the proponent has no predetermined project area and is
interested to venture into Forest Carbon Project, the proponent must secure
tenure or any management arrangement with the DENR.
d. Description of the land cover type(s) of the Project, Leakage, and Reference
Areas based on the latest available land cover map.
SECTION 8. Forest Carbon Project Eligible Timeline and Activities. — Forest
Carbon Projects eligible under CAVCS should not be older than five (5) years, and shall be
implemented for a minimum of 20 years to ensure permanence of project benefits.
Qualified participants may engage in any or combination of the following activities:
8.1 Forest Protection
— Activities that result in avoided emissions of greenhouse gases and
increase in carbon stocks. Examples of forest protection activities include
patrolling, establishment of look-out towers and firelines, risk assessment,
management of forest occupants, etc.
8.2 Afforestation, reforestation and restoration
— Activities that increase carbon stocks, such as but not limited to
tree/mangrove plantations, agroforestry, and assisted natural
regeneration.
SECTION 9. Development of Manuals. — The FMB shall develop CAVCS operations
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 manuals, for the guidance of DENR field offices and other stakeholders.
SECTION 10. Implementation Arrangements. — The FMB Director shall create the
CAVCS Technical Working Group (CAVCS-TWG) to be chaired by the Assistant Director of
FMB, with members from its technical divisions and representatives from the Biodiversity
Management Bureau (BMB) and Ecosystems Research Development Bureau (ERDB). The
CAVCS-TWG shall perform the following functions:
• Oversee the overall implementation of the CAVCS;
• Provide technical assistance to concerned Regional Offices in monitoring FCPP
implementation;
• Monitor the CAVCS Registry; and
• Review and evaluate progress and outcomes of the CAVCS, and coordinate with
relevant government agencies, civil society organizations and other institutions.
The Regional Executive Director shall also create a Regional Technical Working
Group (RTWG) to be chaired by the Assistant Regional Director for Technical Services, with
members from their respective technical divisions, and the PENROs and CENROs where the
project is located. They shall perform the following functions:
• Review the documentary requirements, project concept note, validated FCPP,
verified FCAR, and assurance statement;
• Issue letter of acceptance for the preparation of the FCPP for the review of the
validation and verification body;
• Endorse the approval of the FCPP and FCAR, and the issuance of CECS, CEA and
CCS;
• Update the CAVCS Registry; and
• Assist in the monitoring FCPP implementation in CAVCS project sites.
The Regional Executive Director shall approve the FCPP and FCAR, and issue the
Certificate of Carbon Sequestered and/or Certificate of Emissions Avoided, to the Project
Proponent representing the amount of carbon sequestered and/or GHG emissions avoided
by the ARR or FP project during that reporting period.
SECTION 11. Processes and Procedures in the Implementation of CAVCS. — The
applicant shall follow the application and implementation process specified hereunder
(attached as Annexes 5 & 6):
11.1. Application Phase
11.1.1. The project proponent shall submit the application requirements
along with the letter of intent addressed to the Regional Executive
Director, to the DENR Regional Office where the forest carbon project is
located.
11.1.2. The DENR Regional TWG shall review the LOI and supporting
documents and, if relevant, provide feedback to the Project Proponent
regarding areas where the project design and supporting documentation
can be improved and/or clarified.
11.1.3. The DENR Regional TWG will then issue a Letter of Acceptance.
11.1.4. The Project Proponent shall prepare a Forest Carbon Project Plan
(FCPP) that includes the information specified in this guidance document
including:
a) The area being applied for;
b) Investors or companies involved in the project;
c) Specific activities that will be undertaken;
d) Timeline; and
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 e) The estimated base year carbon stock, the business-as-usual
(BAU) scenario, project scenario, and/or carbon stock to be
protected. This includes the carbon sequestration and/or
avoided emissions projections for the project lifetime.
11.1.5. A Validation Body then validates the Forest Carbon Project Plan to
ensure it meets the requirements as provided in the CAVCS Manuals, and
recommends corrective measures to the Project Proponent, if necessary.
11.1.6. The Validation Body then issues a positive Assurance Statement,
and notifies the Project Proponent, when it has ascertained that the
Project Proponent has addressed all relevant corrective measures.
11.1.7. The Validation Body shall submit the validated Forest Carbon
Project Plan and the positive Assurance Statement to the DENR Regional
TWG. The TWG shall review if the submitted documents are complete and
in order, update the necessary information in the CAVCS Registry, and
endorse the approval of the Forest Carbon Project Plan to the Regional
Executive Director (RED).
11.1.8. The RED shall approve the Forest Carbon Project Plan and issue a
Certificate of Existing Carbon Stock (CECS) recognizing the baseline
carbon stock in the project area. The RED will furnish a copy of the
approved FCPP and CECS to the FMB.
11.2. Implementation and Issuance of Certificates
11.2.1. The Project Proponent shall implement the FCPP and prepare a
Forest Carbon Assessment Report (FCAR) every 5 years.
11.2.2. A Verification Body then verifies the Forest Carbon Assessment
Report to ensure it meets the requirements as provided in the CAVCS
Manuals, and recommends corrective measures to the Project Proponent,
if necessary.
11.2.3. The Verification Body then issues a positive Assurance Statement,
and notifies the Project Proponent, when it has ascertained that the
Project Proponent has addressed all relevant corrective measures.
11.2.4. The Verification Body shall submit the verified Forest Carbon
Assessment Report and the positive Assurance Statement to the DENR
Regional TWG. The TWG shall review if the submitted documents are
complete and in order, update the necessary information in the CAVCS
Registry, and endorse the approval of the Forest Carbon Assessment
Report to the RED.
11.2.5. The RED shall approve the Forest Carbon Assessment Report and
issue the CCS and/or CEA, to the project proponent representing the
amount of carbon sequestered and/or emissions avoided by the ARR or FP
activities for the reporting period. The issued certificates are valid for five
(5) years, and may be transferred by the owner to other entities based on
written agreement. The CCS and/or CEA shall be revalidated every five (5)
years and its corresponding amount of carbon dioxide sequestered
adjusted subject to the submission, verification, and approval of FCAR.
11.2.6. All issuances of CEA, and CCS, and the transfer of such certificates,
shall be reported to the DENR Regional TWG and reflected in the CAVCS
Registry.
SECTION 12. Validation and Verification . — A third-party validator or verifier,
accredited by the Department of Trade and Industry-Philippine Accreditation Bureau (DTI-
PAB), shall validate the Forest Carbon Project Plan and verify the Forest Carbon
Assessment Report to ensure it meets the requirements and recommends corrective
measures to the Project Proponent, if necessary. Project proponents shall engage, contract
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 and shoulder the expenses of validation and verification.
12.1. Interim Validation and Verification Body . An interim validator or
verifier shall be registered based on criteria to be set by the Forest
Management Bureau and shall conduct the validation and verification of the
FCPP and FCAR during the period that the accreditation system for GHG
Validation and Verification Bodies for forest carbon projects is yet to be
established by the DTI-PAB.
12.2. Accreditation of CAVCS Validators and Verifiers . The interim
validation and verification body, as well as prospective CAVCS validators and
verifiers, shall apply for accreditation from the DTI-PAB, once an accreditation
system has been institutionalized.
SECTION 13. CAVCS Registry . — An online registry platform of forest carbon
projects shall be developed and maintained by the Forest Management Bureau for tracking
applications, validation/verification, recognition of protection and sequestration of carbon
stock, and issuance of CECSs, CEAs, and CCSs. Forest carbon projects using international
carbon verification and certification standards shall also be monitored in the CAVCS
Registry for tracking purposes. Such projects do not have to undergo the same validation
and verification process as those projects under CAVCS. Project proponents shall submit
their approved project design documents to the DENR, for proper encoding and updating in
the registry. These projects will not be accounted as part of the total sequestered carbon
or emissions avoided by CAVCS projects.
SECTION 14. Capacity Building. — The DENR-FMB shall provide capacity building
and IEC activities to DENR Field Offices and other stakeholders to promote the
development of forest carbon projects.
SECTION 15. Funding. — The Department shall allocate funds for the
establishment and initial operation of the CAVCS.
SECTION 16. Separability Clause. — In any provision of this Order shall be held
invalid or unconstitutional, the other portions or provisions hereof which are not affected
shall continue in full force and effects.
SECTION 17. Repealing Clause . — All Orders and other similar issuances
inconsistent herewith are hereby revoked, amended or modified accordingly.
SECTION 18. Effectivity Clause. — This Order shall take effect fifteen (15) days
after its publication in a newspaper of general circulation and upon acknowledgement of
receipt of a copy thereof by the Office of the National Administrative Register (ONAR).
(SGD.) ROY A. CIMATU
Secretary

ANNEX 1
CAVCS Forest Carbon Assessment Report (FCAR) Template

ANNEX 2
CAVCS Forest Carbon Project Plan (FCPP) Template

ANNEX 3
Letter of Intent Template

ANNEX 4
CAVCS Forest Carbon Project Concept Note Template

ANNEX 5
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 CAVCS Process Flow — Application Phase

ANNEX 6
CAVCS Process Flow — Implementation Phase

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