What are "future-stream" versus "standard" offsets?

The difference between future stream and standard offsets is whether the offsets are sold before or after the emissions reductions they represent have occurred. Each model has its advantages.

In the future stream model, a developer conservatively estimates the total offsets a project will produce over its lifetime. The developer then sells the offsets to get upfront capital to build the project. This model works well for small projects that don’t produce very many offsets and can’t get a loan for construction. When you buy a future stream offset, you know you helped provide funding that was crucial for project construction, but you don’t know exactly when the offset will be produced.

In the standard model, a developer takes out a loan to build a project. At the end of each year the developer calculates how many offsets the project produced and sells them to pay down the loan. This model works well for large projects that produce a lot of offsets and can get a loan for construction. When you buy a standard offset, you know exactly when, where, and how that offset was created. You’re also sending a signal to the market that people are willing to buy offsets, which will encourage more developers to build offset projects.

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