The correct answer is B. ESP. In IPsec, the security protocol responsible for encrypting protected traffic is Encapsulating Security Payload (ESP). Juniper defines ESP as the IPsec protocol used for encrypting the IP packet and authenticating its contents. In practical SRX VPN design, ESP is the normal protocol selected when confidentiality is required because it can provide encryption, packet integrity, authentication, and anti-replay protection depending on the configured IPsec proposal.

Option A, SHA-1, is incorrect because SHA-1 is an authentication/hash algorithm, not an IPsec security protocol and not a payload encryption mechanism. Option C, AH, is incorrect because Authentication Header validates packet source and integrity but does not encrypt payload data. AH is therefore unsuitable when the requirement explicitly says payload data must be encrypted. Option D, PFS, is incorrect because Perfect Forward Secrecy is a key-exchange property used during Phase 2 rekeying; it strengthens key independence but does not itself encrypt packets. In Junos IPsec configuration logic, the security protocol decision is between ESP and AH, and encryption requires ESP. Reference topics: IPsec VPN, ESP, AH, IPsec security protocols, payload confidentiality, IPsec proposal design.