Brussels, 30 November 2022 – Today, the European Commission published its legislative proposal on a Carbon Removal Certification Framework (“CRCF”), which would establish overarching EU rules to govern how the climate benefits of carbon dioxide removal (“CDR”) are quantified and verified. The stated goal is to foster and accelerate the scale-up of sustainable carbon removals, which includes a wide variety of innovative methods for farmers, foresters, industries, and others to capture and store non-fossil CO2 (atmospheric or biogenic). Certification represents a necessary and significant step toward integrating carbon removals into EU climate policies, ensuring the development of a strong carbon removal capability in Europe, and realising the potential for European leadership in this space.
The CRCF and its role in EU climate policy
The CRCF will act as an “update” for EU climate regulation, unlocking the ability to measure, validate, and certify carbon removal in the EU and possibly beyond. It will form a foundation which policymakers at the local, national, EU, and even international level can draw on as they craft policies that incentivise or govern carbon removal activities. This includes everything from the creation of incentives for soil carbon storage for land managers (e.g., via the Common Agricultural Policy), rewarding procurements of building materials that store non-fossil carbon (e.g., via building codes), to enabling imports of carbon neutral or carbon negative products (e.g. Carbon Border Adjustment Mechanism). Beyond policy, the impact of the CRCF will be widely felt. Regulatory leadership by the EU can help build confidence among the public, investors, carbon removal providers and carbon removal buyers, that CDR methods can be deployed in a safe, secure, and just way. We lay out the case for effective carbon removal certification, and the design of the CRCF in particular, in our “Guide to Certifying Carbon Removal”.
Considering the stakes, we welcome the Commission’s proposal as a step toward robust certification, but highlight many opportunities to strengthen the framework to ensure it delivers its goals and does not have unintended consequences on the carbon removal sector in Europe and beyond. As the baton passes to the European Parliament and the Council, we offer our preliminary assessment of the proposal and some early recommendations as the CRCF enters the next phase.
Sticking to definitions – Emission reductions are not carbon removals, and must be excluded from CRCF
The certification framework, as currently set out, introduces a high degree of confusion by incorrectly defining certain CO2 emissions reductions as carbon removal. Namely, it provides a role for emission reductions from biogenic carbon pools to the atmosphere under the proposed certification framework. Avoiding further forest conversion, for example, and many other biogenic emission reductions are critical activities that urgently need more support, but that does not make them carbon removal.
We fully support the need to urgently halt and reverse the erosion of carbon sinks, and to develop a robust methodology measuring these emissions reductions. But activities that do not remove carbon should be clearly defined as such and regulated separately.
The EU cannot afford to get the definition of carbon removal wrong. The IPCC, the globally-accepted authority on climate change, has already confirmed the definition of carbon removal as human activity that extracts CO2 from the atmosphere and durably stores it, in keeping with decades of scientific consensus. Diverging from this definition risks bifurcation, and potentially isolating the EU from global markets. Other countries (e.g. UK, US), and other supranational efforts in the private sector such as the ICVCM, are clearly distinguishing between removals from reductions. The EU has the opportunity to surpass these initiatives, given the ambitious vision for the CRCF, but would risk hobbling the effort if non-removals are erroneously included in its overall definition of carbon removal.
Furthermore, to ensure the framework is effective in a practice, several other concepts need clarification, including the definition of “permanent removals”, which should be based on the geochemical format of the stored carbon, and the duration of storage necessary for a method to be considered “long-lasting” or the precise criteria for a carbon removal method to fall into a specific method family (i.e., carbon farming, permanent removals, or carbon storage products) and, consequently, under specific governance rules.
Use it or lose it – The CRCF cannot be agnostic as to how certified removals are used
The journey of a carbon removal activity doesn’t end with the storage of removed atmospheric carbon, nor with the act of certifying the activity. One final step is critical: the way in which certified carbon removal is “used”. Which uses are permitted for which types of removal will have massive implications for the EU’s ability to meet its climate goals.
Removals can be used to claim to compensate for emissions, or for another purpose (results-based finance, contribution claims, demonstration of alignment with a policy or requirement, etc.). When removals are used for compensation, specific rules must apply and will need to be spelled out in the CRCF itself. This cannot be left open to interpretation or deferred to other legislation to regulate, because the rigour (and therefore the cost) of certifying a removal must be substantially higher for compensation claims than for other uses. In short:
- Only unavoidable, expensive-to-abate emissions are permissible to compensate for with removals. Other emissions should be eliminated, not offset.
- Fossil fuel emissions can only be compensated for with highly-durable, permanent removals where the long-term storage of carbon matches the long-term impacts of emissions.
- Emissions from the land sector could be balanced by removals into the land sector. The EU already separates the LULUCF pillar from industrial sector emissions. Rather than risk crossing that divide by trying to sell land-based removal into an undifferentiated voluntary market, we can look elsewhere for ways to incentivise the removals that fall under the “carbon farming” label. Many such options exist already, from re-gearing and increasing Common Agricultural Policy incentives, to dedicated reforestation schemes, to other direct public and private incentives in which contributions are made to fund ecosystem restoration, but no emissions are compensated for.
Early retirement – Track removed carbon from cradle to grave
We are encouraged to see clear efforts in the proposal to avoid double-counting by ensuring full transparent interoperability among registries under the CRCF. One further addition is required: an explicit requirement that not just the generation of carbon removal certificates, but also the end fate of all carbon removal units, be tracked on the registry. With this requirement in place, each registry operating under the CRCF umbrella would record how each unit of certified removal is used, not only to avoid double use but also to confirm which type of emission (fossil or biogenic) it is claiming to compensate for. We can prevent companies from making unsubstantiated and fraudulent environmental claims to consumers (greenwashing) that would erode the public trust in effective, well-measured carbon removal and undermine the CRCF’s stated purpose, but we must embed the capability to police these uses into the CRCF itself.
While the Commission was aiming to address the issue of greenwashing with its initiative on Substantiating Green Claims, this is now delayed. In the absence of such a complementary framework, setting out within this framework how and when carbon removal certificates, and certified units, can be used is more important than ever.