# How do milestone payments in a carbon removal forward contract work?

Canonical: https://senseible.earth/answers/carbon-removal-forward-contract-milestones

In Frontier's published offtake template, the buyer pays only when credits are delivered, meaning issued by the credit issuer and received by the buyer. Before that, milestones gate the deal: conditions precedent set the commencement date, then construction reaches a commercial operation date. Miss them without a fix and the buyer can walk away.

## The milestone sequence

1. Effective date: the contract is signed.
2. Conditions precedent: project-specific items the buyer must approve, such as permits, a technical milestone, and an approved protocol and credit issuer.
3. Commencement date: all conditions met. From here the buyer is committed to pay for credits delivered to spec.
4. Financial close: lenders usually fund after commencement.
5. Commercial operation date: the facility is built and can deliver.
6. Delivery: the buyer receives the supplier's certification and the issued credits. Payment follows each delivery.

## If the project slips

- The supplier can deliver less, as long as it beats a minimum quantity by a set year.
- Six more months to reach commencement if the delay is explained, plus more at the buyer's discretion.
- Below the minimum, the buyer can end the deal, with no damages owed. The template keeps damages limited.

## Other terms to read

- Project description: the buyer pays only for credits that match it, so a change of feedstock can matter.
- Protocol changes need the buyer's approval or both sides' agreement; the template does not adjust price or volume for them.
- Right of first offer on extra or future tonnes.

## Prepurchase is different

A prepurchase pays upfront, before tonnes exist. Frontier uses it for early-stage teams; offtakes pay on delivery.

## What Senseible does here

Forward contract and milestone tracking is one of Senseible's carbon removal capabilities: each milestone and delivery sits next to the batches and verifier evidence pack behind it, so both sides see what is due.

- [Carbon removal projects](https://senseible.earth/carbon-removal/projects)
- [Offtake agreements](https://senseible.earth/answers/carbon-credit-offtake-agreement)
- [Money before issuance](https://senseible.earth/answers/pre-finance-for-carbon-projects-india)
- [Frontier offtakes for India](https://senseible.earth/answers/frontier-offtake-can-indian-project-apply)

Sources: [Frontier, Publishing Frontier's offtake agreement template (15 August 2024)](https://frontierclimate.com/writing/offtake-agreement-template), [Frontier, Apply for offtake: evaluation lenses, diligence steps and contracting](https://frontierclimate.com/apply/offtake)

Last reviewed 2026-11-02.