Relae and Microsoft Publish Science-Based Framework for High-Quality IFM Carbon Credits

On October 8, 2026, Relae (formerly Carbon Direct), in partnership with Microsoft, released a new paper titled Improved Forest Management: Progress, Challenges, and Opportunities. Authored by a team of Relae scientists, the publication offers a science-based framework for designing and evaluating high-quality improved forest management (IFM) carbon credits, giving project developers and buyers the practical tools needed to bridge the gap between minimum registry requirements and what genuinely high-integrity IFM projects demand.

IFM refers to managing existing working forests to store more carbon dioxide while continuing to produce timber, through practices such as extending harvest rotations, reducing logging intensity, and protecting riparian buffer zones. It is one of the fastest-scaling credit categories in the voluntary carbon market. Since the first IFM credits were issued in 2008, 1,056 projects have been listed on voluntary registries, generating over 274 million credits globally, which represents 29 percent of all forestry and land-use credits. Buyer demand is accelerating rapidly, with IFM credit retirements rising approximately 118 percent between 2023 and 2025.

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What the Framework Covers

The paper is organized around three central quality dimensions: baselines and additionality, leakage risk, and social and community impact. For each area, Relae provides practical frameworks and checklists tailored to both credit buyers and project developers. The goal is to fill in methodological gaps that have historically undermined buyer confidence in IFM projects.

Baselines and Additionality

The paper stresses that baselines and additionality are the foundation of IFM crediting, and that the two must be treated as linked. How a project constructs its baseline directly determines whether its additionality claim holds up. Relae calls for credible baselines to reflect what would have actually happened in the absence of carbon finance, using project-specific, externally verifiable data. The paper highlights dynamic baselines as the most significant recent methodological advance in this space. In 2025, the Integrity Council for the Voluntary Carbon Market approved several IFM methodologies under its Core Carbon Principles label, including protocols that incorporate dynamic baseline approaches.

Leakage Risk

On leakage, the framework recommends a heuristic-based screening approach rather than relying on the flat-rate deductions that many existing methodologies apply across all projects. Relae proposes that buyers and developers first assess how large a project's leakable carbon pool is relative to its total climate benefit, then evaluate factors such as market integration, product substitutability, and forest growth rates. The paper notes that some projects may warrant larger leakage deductions than current registry defaults require, in order to ensure that credit accounting remains conservative and credible.

Community and Social Impact

The framework classifies community impact as a defining risk for industrial IFM projects. When a large industrial landowner substantially reduces timber harvesting over a multi-decade crediting period, the effects can ripple through local economies, affecting logging contractors, mill workers, and rural communities that depend on timber-related employment and revenues. Relae argues that buyers cannot verify whether a project is benefiting or harming local communities without meaningful stakeholder engagement and benefit-sharing requirements baked into project design.

"Working forests can make a meaningful contribution to carbon removal, but only if projects address the challenges that have historically limited confidence in improved forest management projects," said Phillip Goodman, Director, Carbon Removal Portfolio at Microsoft. "This paper gives developers practical guidance on baselines, additionality, leakage, and social outcomes, helping chart a path for projects to verifiably sequester carbon dioxide and maintain productive working forests."

About Relae

Relae (formerly Carbon Direct, rebranded September 2026) is a strategic decarbonization advisory firm at the intersection of climate and energy. Trusted by more than 150 global clients, the firm delivers scientific, engineering, and market expertise across four service areas: power and energy advisory, strategy and analytics, environmental markets, and natural capital. Relae has completed more than 900 carbon project diligence reviews and has advised on over $6 billion in industrial project finance. The firm has partnered with Microsoft since 2021 on the annual Criteria for High-Quality Carbon Dioxide Removal, a widely used benchmark for evaluating CDR credit integrity across the voluntary carbon market.

Source: Relae: Improved Forest Management: Progress, Challenges, and Opportunities (October 8, 2026)