LIMITS ON SUBSTITUTING REMOVALS FOR EMISSIONS REDUCTIONS

An authority or climate standard-setter sets a maximum amount of carbon removal that may count towards meeting a climate target or making a claim. For example, if a target requires a 100-tonne improvement and allows at most 10 tonnes of removals, at least 90 tonnes must come from emissions reductions. A company could buy more removals, but the excess would not help it meet that target. By stating the limit in tonnes or as a clearly defined percentage, the rule makes the expected balance between emissions cuts and removal use checkable. It is useful wherever a net target would otherwise leave that balance open.

The rule-maker must decide what the limit is measured against. Ten per cent of emissions in a historical baseline year can allow a different quantity from ten per cent of today's emissions or of a required improvement. The covered activities, calculation year and maximum quantity should therefore be explicit. The limit should reflect feasible emissions cuts and the role intended for removals, while eligibility rules determine storage duration, overseas use and treatment of invalid or reversed credits. Separate reporting of emissions and removals makes compliance visible. Announced review dates and transition rules help users plan when the permitted amount changes.

Giving removals an explicit, limited role makes it harder to present purchased credits as cuts in a company's own emissions. Buyers and suppliers can plan around a published rule about which uses will be recognised, while regulators can test compliance using separate emissions and removal figures. Applying the same ceiling across a scheme also reduces incentives to seek a more permissive interpretation from another assessor. The permitted quantity establishes room for removal use, without promising that anyone will purchase the full allowance.

If the permitted quantity is too large, removals can replace emissions cuts that were feasible. If it is too small, the rule can leave no workable route to address emissions the target allows to remain. Companies may enlarge their allowance by choosing a favourable baseline or changing which activities they report. Abrupt tightening can also undermine purchases made under earlier rules. Consistent calculation methods, credible removal eligibility and advance notice of changes are therefore essential to keeping the ceiling meaningful.

Administrators should compare the removal quantity counted towards each target or obligation with its permitted maximum, alongside actual emissions cuts. Reviews should examine whether users change reporting boundaries to enlarge the allowance and whether invalid credits or reversals are corrected. Evidence of avoidable emissions persisting, an unworkable compliance route or inconsistent calculations should inform the next limit and its transition arrangements.

Setting a workable ceiling requires emissions-intensive sectors, workers, CDR suppliers and buyers to explain abatement options, residuals and supply. Scientists, standards bodies, registries and auditors test accounting and durability. Regulators, consumer-protection authorities, investors and civil society assess enforceability, claims and whether the rule protects real reductions without disguising distributional effects.

International compliance bodies and recognised standards organisations can set limits for the systems and claims they govern. Supranational, national and state authorities can impose limits through climate legislation or regulated programmes. Industry standard-setters can make the ceiling a condition for recognised targets or claims, and companies can adopt it as an internal requirement. In each case, the implementing actor controls the accounting or recognition rule and the consequences of exceeding it.