Offtake agreement
A long-term contract to buy a defined volume of project output, used to underwrite project finance.
An offtake agreement secures a buyer for future production — credits, electricity, biochar, removed carbon — at agreed volumes and terms. Lenders use it as evidence that revenue will exist.
In carbon projects the offtake is usually the credit stream itself, and its bankability depends on how firmly the volumes are committed. A best-efforts arrangement supports a narrative; a firm, take-or-pay structure supports a loan.
The risks that offtakes do not solve are delivery and integrity. A buyer committed to volume still needs the project to verify, and still carries the reputational exposure if quality proves weaker than represented.
Frequently asked questions
What is take-or-pay?
A clause requiring the buyer to pay regardless of whether it takes delivery, shifting volume risk toward the buyer.
Is an offtake the same as an ERPA?
They overlap. An ERPA is a specific form of offtake covering emission reductions.