Take on a podcast episode from The CDR Policy Scoop, originally published Mon, 17 Au. Listen: https://shows.acast.com/the-cdr-policy-scoop/episodes/article-6-letters-of-authorisation-explained-with-lisa-demar

TL;DR

  • A letter of authorisation (LoA) under Article 6 is a legally enforceable contract against the sovereign — not paperwork. Useful reframing for developers who treat it as admin.
  • Letters of approval, acknowledgement, and no objection are NOT LoAs. Only documents conforming to Article 6.2/6.4 minimum requirements count. Market confusion here is rampant.
  • KOKO’s collapse in Kenya hinged on two ministries each denying authority to issue the LoA. Concrete cautionary tale for LoA counterparty diligence.
  • Since Jan 2025, ~35 projects authorised, ~100 Mt max volume — versus EU 2040 demand potentially in the hundreds of millions. Supply gap is real.
  • No retroactive revocation of units post-first-transfer (COP29 clarification), but entity-level revocation for fraud/breach is being reserved — and should be.

Sebastian Manhart and Eve Tamme host Lisa DeMarco (Resilient LLP) for a 30-minute legal deep dive on Article 6 letters of authorisation: what they actually bind, how they fail, and why the pipeline of authorised credits is running well behind projected demand. If you’re a durable CDR developer pursuing Article 6 sales — or a buyer trying to understand what you’re actually buying — this is one of the more precise explainers I’ve heard.

What’s worth knowing. DeMarco’s central point: an LoA authorises three distinct things — the entity, the cooperative approach, and the units themselves — and conflating them is where deals blow up. Her KOKO breakdown is the clearest public explanation I’ve seen: the framework agreement committed the government to issue an LoA, but the Ministry of Finance and Ministry of Environment each argued the other held the authority. Result: no LoA, no enforceable contract, insurance claim dispute. For developers, the takeaway is that “who signs” matters as much as “what it says,” and the constitutional/administrative diligence on the host-country side is genuinely non-trivial — not a rubber stamp.

The supply gap is the real story for CDR buyers. Eve pulls the number from IETA’s Article 6 directory: ~35 projects authorised since Jan 2025, ~100 Mt maximum combined volume, plus another ~100 Mt authorised earlier. Against EU 2040 plans potentially absorbing hundreds of millions of credits, plus CORSIA, that’s tight — and much of that authorised volume is not durable removal. DeMarco’s answer is standardisation: the World Bank model LoA forms, the Article 6 Implementation Partnership (Japan-facilitated), and the CORSIA Supply Project. Her lawyerly instinct — “I’d rather see the upfront diligence” than retroactive revocation risk — is the right one for a market that cannot afford another KOKO. Quote worth keeping: retroactive revocation of transferred units is “like printing a dollar bill and then having the ability to rip it up.”

Adjacent context. For durable CDR, this matters because host-country authorisation is the gating item for any cross-border sale into compliance demand — including the EU’s 2040 target architecture that could unlock institutional CDR buying at scale. The corresponding adjustments question — required only when units are authorised toward another NDC or “other international mitigation purposes” like CORSIA — remains contested, and DeMarco’s proposed “letter of acknowledgement” workaround (for contribution claims without CA) is a practical suggestion the World Bank has apparently baked into its model documentation. Worth reading alongside prior Policy Scoop debates on whether CAs belong in the voluntary market at all.

Who should listen. Article 6 project developers, buyer-side counsel, and anyone modelling durable CDR supply into EU or CORSIA compliance demand. Skip if you’re purely vo