Forest & Carbon Credit Industries

FRAS International LLP offers premier guardianship in the forestry and carbon credit sectors by connecting technical carbon sequestration, environmental regulations, and financial reporting. Our comprehensive services include everything from project development advisory to auditing for compliance with both national and international carbon market standards.

Our Roles & Responsibilities:

Carbon Credit Advisory and Structuring

• Project Structuring: We provide expert advice on legal and financial frameworks for initiatives like REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and afforestation, ensuring optimal credit generation.
• Contract Negotiation (ERPA): Our team reviews Emission Reduction Purchase Agreements (ERPA) to mitigate risks associated with carbon credit pricing, title transfer, and potential delivery failures.
• Regulatory Compliance: We ensure adherence to voluntary carbon market standards, such as Verra and Gold Standard, along with emerging national frameworks like India’s Green Credit Program.

Carbon Accounting and Financial Reporting

• Accounting Policy Development: We design policies for the proper recording of carbon credits, determining their classification as inventory, intangible assets, or revenue based on their intended use (trading vs. offsetting).
• Valuation and Impairment: Our specialists ascertain the value of carbon credits whether generated or purchased, conducting impairment tests and recognizing income upon transfer.
• Financial Reporting: We assist in accurate disclosure of carbon credits and associated liabilities within financial statements.

Verification and Audit Services

• Independent Assurance: Acting as third-party verifiers, we validate emission reductions, ensuring the reliability of data in Monitoring Reports (MR).
• Internal Controls Assessment: We assess internal systems that track forestry project data to maintain data integrity for emission calculations.
• Verification Support: Our team manages the process of appointing Designated Operational Entities (DOEs) for validation and verification, overseeing the issuance process.

Taxation and Compliance

• Direct Tax Advice: We navigate the tax implications related to the sale of carbon credits, ensuring compliance with relevant sections, such as 115BBG under the Income Tax Act in India.
• Indirect Tax (GST) Advisory: We evaluate GST implications on carbon credit transfers, particularly for cross-border transactions (exports) and input tax credits.

Sustainability and ESG Reporting

• ESG Integration: We help companies align sustainability reporting with financial objectives, supporting their pursuit of Net Zero targets and the reporting of climate-related financial risks.
• Forestry Inventory Accounting: Our approach applies financial principles to natural resource accounting, including calculating the Net Present Value (NPV) of carbon stocks.