Background Recent data arising from the application of the Kyoto Protocol (KP) demonstrate that the strategies adopted until now have not sufficiently checked or reversed the increased concentrations of greenhouse gases (GHG) in the atmosphere – in particular CO2 – and their effects on climate change. Among the many tools to challenge climate change, there is recognition that forests can trap large amounts of atmospheric carbon and therefore act as a low-cost and natural mitigation strategy. In the second KP application period, starting from 2012, a forest can be called a carbon ‘sink’ and be allowed to generate credits for meeting country carbon reduction targets. The implementation of this approach, however, is not totally clear. In order to stimulate this strategy, it will be useful to set up local initiatives that will let forest owners and managers adopt management strategies aimed at carbon sinking and involve, on a voluntary basis, those companies that are not yet involved in the KP mechanism. Objectives The overall goal of the CARBOMARK project was to promote voluntary local carbon markets as an instrument for strengthening EU policies related to the Kyoto Protocol and implementation of the ‘EU Forest Action Plan’ under the Sixth Environment Action Programme. This would be achieved by setting up a model of a local market for carbon credits that would help reduce and compensate for GHG emissions. This model would be tested on a voluntary basis by subjects currently not directly considered, such as SMEs excluded by the ETS directive, and forest owners. Specific objectives were to: Consolidate the knowledge base for supporting EU policy and legislation related to voluntary local carbon markets (trading carbon quotas) as a tool for reducing GHG emissions within the KP framework; Facilitate the implementation of strategies for mitigating GHG at local and regional level that are consistent with Community environmental policies; Establish the legislative and technical background necessary to support and improve the dissemination of regional carbon markets at national and European level; Recognise the role of sustainable soil management strategies as a temporary but important measure for absorbing CO2 from the atmosphere; Involve SMEs in contributing to the survival of the forest economy, also in more marginal lands; Improve the awareness of stakeholders, particularly forest owners and SMEs, about the need to adopt initiatives for the mitigation of GHG emissions into the atmosphere. The project targets an eventual facilitation of further EU legislation related to the post-2012 Kyoto strategy, with a view to reducing GHG in the atmosphere substantially by 2020.Results At the start of the CARBOMARK project in 2007, research on the implementation of the Kyoto Protocol showed that the then current strategies were insufficient to mitigate the increase of GHG in the atmosphere and to combat climate change. While there were no technological solutions that could be adopted on a wide scale, CO2 offsetting by means of forests represented a valid strategy for mitigating the medium-term effects of high GHG concentration. The project was based on the assumption that the implementation of the strategy for increasing CO2 adsorption through forests, if developed on a voluntary basis, could help mitigate the problem and was in line with the strategies of the Kyoto Protocol. Moreover, it could be integrated into other initiatives for the voluntary reduction of SMEs’ emissions, and, moreover, in sectors that were not already covered by the EU Emission Trading Scheme directive (ETS-EU). The project objective was to promote ‘local’ initiatives that, on one hand, could encourage forest owners to adopt forest management strategies oriented towards carbon sequestration and, on the other hand, could secure the voluntary involvement of the SMEs, which had not been yet included in EU ETS, but were interested in the ‘green economy’ and in improving their environmental performance. The effectiveness of the strategy proposed by CARBOMARK was confirmed at the World Climate Summit, in Durban, South Africa, on 3-4 December, 2011. The CARBOMARK project produced the following main outputs: Three preliminary studies (concerning technical, economic and legal aspects of voluntary carbon markets); A CARBOMARKManual, as a complete tool assisting in the implementation of local carbon markets in the two regions targeted by the project (Veneto and Friuli Venezia Giulia), which can be replicated in other geographical areas; Two ‘Kyoto Observatories’ for the implementation of local carbon markets in the two Italian regions.The research work led to the definition of three main principles – permanence, ‘additionality’ and baseline – of local carbon markets and helped establish activities that can be considered as sources of carbon credits. Permanence refers to stable carbon sequestration achieved by project activities; carbon stocking is a temporary measure whose effects on climate change mitigation directly depends on it remaining in an unaltered condition in the wood mass for a significant time. The additionality principle is another key factor for project eligibility. It provides that projects for carbon sequestration are only eligible for carbon credits if the resulting emission reductions are additional to any that would occur in the absence of the certified project activity. Additionality represents the scenario for a mitigation activity that determines additional carbon sequestration compared to the ‘baseline’. Finally the baseline is how the situation would be if no initiative had been undertaken. An economic study was carried out to support SMEs in adopting procedures and strategies (included joining local carbon markets) improving their environmental performance. A legal study made a comparison among several credit certification standards related to forest management and products and it highlighted strengths and weaknesses for each standard. Thanks to this analysis, CARBOMARK could partly profit from particular elements of other standards and integrate them to develop an easy but effective approach. Several models of contracts were also be drawn up and considered by the partners’ technical staff for the trading of carbon credits. The results of the preliminary studies were adopted and integrated in the CARBOMARK Manual. The manual includes all procedures and relevant elements that will support the operative aspects of the market. It defines the method for calculating carbon shares, taking into account the three abovementioned basic principles, particularly regarding the share amounts, the security buffer and the real additionality in respect of the shares already accounted by the national government into the Kyoto Protocol procedures. The document considers three types of carbon stocking: forest management, wood products and urban forest. A fourth stocking opportunity, currently considered as ‘experimental’, is biochar (the material obtained by the pyrolysis of biomass). Procedures for local carbon markets and Kyoto Observatories were established, and the observatories are now fully operational and will continue after the end of the project. The CARBOMARK website was created to regulate transactions of carbon credits between buyers and sellers. During the project three public auctions for selling carbon credits were held. At the end of the project, 21 private companies and 27 public forest owners had joined the CARBOMARK market and three buying contracts had been signed. According to these contracts, 350 tonnes of carbon will be stocked and the companies will reduce their emissions by adopting policies that will improve their environmental performance. Together with Ecosystem Marketplace, an initiative by the non-profit organisation called ‘Forest Trends’, which is a worldwide information source on green markets and the payment for ecosystem services, CARBOMARK is one of 13 government initiatives globally to establish voluntary carbon markets. Only three out of the 13 initiatives are in Europe. This result is described in the report, ‘Bringing it at home: taking stock of government engagement with the voluntary carbon market’, issued in March 2012. This report is also quoted by Forbes, Reuters and Point Carbon, as well as being mentioned in the supplement of the New York Times Climate Wire (www.ecosystemmarketplace.com/pages/dynamic/article.page.php?page_id=8922§ion=news_articles&eod=1). Further information on the project can be found in the project's layman report (see "Read more" section).