The Northern Great Plains Regenerative Grazing Project is a HelpBuild™ project, meaning that companies are helping to catalyze climate action by purchasing tonnes upfront that will be produced from the project over time. The upfront investment provides needed financing to ranchers to help cover the costs of practice change. This project has a 20-year crediting period, 2019-2039. But the HelpBuild period is only expected to be 5-7 years. What that means is that we have – for each ranch – made a conservative projection of how much carbon they will accrue through the defined practice change within a 5-year period; that number equates to how many HelpBuild tonnes we sell upfront to project supporters (about 200,000 tonnes). Once each rancher produces their portion of the HelpBuild tonne quantity, all 200,000 tonnes will be verified and issued on behalf of project supporters and the HelpBuild period will be over. Then the project will continue to issue and sell credits on an annual basis, associated with continued carbon accruals above those achieved in the HelpBuild period, until the end of the crediting period in 2039.
Production risk pertains to: what if the credits a project supporter purchased upfront are not actually issued? Currently, Native is only selling credits associated with the HelpBuild period. We expect for all of the credits purchased to be accrued by ranchers by 2024. However, if something went wrong, and the ranchers do not produce the expected number of tonnes by that time, they can continue to work to achieve their HelpBuild number all the way until 2039. In that way, we project an over 99% probability that these credits will be produced and issued on behalf of buyers. And if, by some force majeure, the credits are not delivered within that timeline, we commit to buyers to make them whole through the retirement of credits from a different project on their behalf.