Announcing Herzog Fox & Neeman participation in the Carbon Data Open Protocol

May 2025

Herzog Fox & Neeman has joined the Carbon Data Open Protocol (CDOP), a collaborative industry initiative uniting over 30 leading organizations to develop and harmonize carbon credit data across markets. Herzog participates as a legal advisor, contributing to the development of data governance frameworks that improve transparency and enable more efficient due diligence in voluntary carbon market transactions.

By harmonizing definitions and creating clear data standards, the initiative aims to:

• Boost transparency and trust
• Improve efficiency through standardized processes
• Enhance market integrity and scalability

We are proud to have the opportunity to contribute our legal and regulatory expertise to this important effort, and to collaborate with a diverse group of stakeholders committed to high-integrity, data-driven climate solutions. We believe that standardization is crucial for credible climate solutions. We’re excited to help shape the future of high-integrity carbon markets.

The CDOP will be launched during the upcoming New York Climate Week.

To learn more about the Carbon Data Open Protocol >> click here

What is the Carbon Data Open Protocol?

The Carbon Data Open Protocol (CDOP) is a global, multi-stakeholder initiative established to develop a common framework for carbon market data. Launched in 2025 by a coalition of leading organizations from across the carbon market ecosystem, CDOP aims to create standardized definitions, rules, and governance structures for the data that describes carbon crediting projects and carbon credits.

The initiative was founded by four co-chairs: the Global Carbon Market Utility (GCMU), Sylvera, RMI (formerly Rocky Mountain Institute), and S&P Global Commodity Insights. Together with supporting organizations from the private, public, and nonprofit sectors, CDOP seeks to address one of the most significant barriers to scaling carbon markets: the absence of a common language for carbon credit data.

CDOP’s objective is to develop an open, interoperable data standard that can be adopted across registries, project developers, rating agencies, market infrastructure providers, financial institutions, and corporate buyers. The initiative will establish a common data schema, standardized definitions, and a governance framework for maintaining and updating the protocol over time.

Importantly, CDOP is designed to complement existing market initiatives and infrastructure, including the Climate Action Data Trust (CAD Trust), the Integrity Council for the Voluntary Carbon Market (ICVCM), and emerging frameworks under Article 6 of the Paris Agreement. By improving transparency, consistency, and interoperability, CDOP aims to strengthen market integrity and help unlock the full potential of carbon markets as a tool for climate action.

Why Does Carbon Credit Data Need Standardization?

Despite rapid growth in both voluntary and compliance carbon markets, market participants continue to face significant challenges resulting from fragmented and inconsistent data systems. Today, there is no universally accepted protocol governing how information about carbon projects and carbon credits is structured, described, shared, or interpreted.

As a result, critical project information is often recorded differently across registries, standards, rating agencies, and data platforms. Market participants may encounter inconsistent terminology, incomplete disclosures, incompatible data formats, and varying approaches to project classification and performance reporting. This fragmentation creates inefficiencies throughout the market and increases the cost and complexity of participation.

For buyers, investors, and financial institutions, conducting due diligence frequently requires gathering information from multiple sources and reconciling conflicting datasets. Legal and compliance teams must spend considerable resources verifying ownership, project status, methodology applicability, issuance records, and regulatory eligibility. The lack of consistent data standards can also increase transaction risk, create uncertainty regarding credit quality, and complicate efforts to assess environmental integrity.

As carbon markets become increasingly integrated into corporate climate strategies, financial products, and international regulatory frameworks, the need for standardized and interoperable data becomes even more important. A common data standard can improve transparency, reduce transaction costs, facilitate information sharing, and enable more informed decision-making across the entire carbon market value chain.

Who Participates in CDOP?

CDOP brings together a diverse group of organizations representing virtually every segment of the carbon market ecosystem. At launch, more than 30 leading organizations joined the initiative, with additional participants continuing to engage in its development.

Participants include carbon registries, carbon ratings agencies, market infrastructure providers, project developers, technology companies, financial institutions, and nonprofit organizations. Supporting organizations include well-known market leaders such as Verra, Puro.earth, Isometric, Climate Action Data Trust (CAD Trust), South Pole, Sylvera, and S&P Global Commodity Insights, among others.

Herzog is proud to participate in this effort, contributing legal and regulatory expertise to discussions concerning data governance, market integrity, interoperability, due diligence requirements, and alignment with evolving carbon market regulations and international frameworks. Our involvement reflects the firm’s ongoing commitment to supporting the development of high-integrity carbon markets and the infrastructure necessary for their continued growth.

How Does CDOP Improve Carbon Credit Transactions?

The practical value of CDOP lies in its ability to reduce friction and improve confidence in carbon credit transactions. By creating standardized definitions and data structures, CDOP enables market participants to access and interpret project information more efficiently and consistently.

For carbon credit buyers, standardized data can improve transparency regarding project characteristics, methodologies, issuance history, verification status, and environmental performance. This facilitates more effective due diligence and supports better-informed purchasing decisions.

For investors and financial institutions, common data standards can reduce information asymmetries, simplify risk assessment processes, and improve comparability across projects and portfolios. Standardized datasets also create opportunities for greater automation, analytics, and integration into broader financial and reporting systems.

The benefits extend beyond individual transactions. By improving interoperability between registries, data platforms, and market participants, CDOP can help build the digital infrastructure necessary for a more transparent, efficient, and scalable carbon market. As international carbon trading continues to expand, particularly under Article 6 of the Paris Agreement, initiatives such as CDOP will play an increasingly important role in supporting market integrity, facilitating climate finance, and enabling carbon markets to deliver meaningful climate impact at scale.

Related Carbon Market Insights:

• Unlocking Carbon Market Demand: How Safe Harbors Can Protect Corporations from Greenwashing Risk

• De-risking Carbon Markets: Managing Legal Uncertainty in Carbon Credits

• Dr. Ruth Dagan Appointed Co-Chair of IETA Legal Working Group