BlogCO2 Management

New EU standards for carbon removals

Written by

Ulf Narloch

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The EU is putting in place the first union-wide carbon removal certification framework. These new voluntary standards aim at boosting credible removal activities. Carbon removals are deemed necessary to compensate for hard-to-abate emissions to achieve climate neutrality by 2050 and negative emissions thereafter.

Scaling up carbon removals

The European Parliament has adopted a bill for the Carbon Removal Certification Framework (CRCF). This regulation defines voluntary standards to scale up high-quality activities that ensure carbon dioxide removals (CDR).

Such removals are deemed necessary to offset hard-to-abate emissions. They will play an increasing role in reaching the EU climate goals of net-zero emissions in 2050 and net-negative emissions thereafter. A recent proposal by the European Commission aims for an annual removal of about 400 Mt CO2e by 2040.

For 2030, the legal target as defined by the European Climate Law is to remove about 225 Mt CO2e. The revisions to the LULUCF regulation (amendment 2023/839) even have set a target for land-based removals of 310 Mt CO2e per year by 2030.

In addition, the Commission’s action plan for Sustainable Carbon Cycles from 2021 highlights the role of technological removals. It included a target of 5Mt CO2 to be annually removed from the atmosphere and permanently stored. These targets are further supported by the EU’s industrial carbon management strategy.

The CRCF sets the standards for the certification of such removals. The initial proposal was made by European Commission in November 2022. A provisional agreement between European Parliament and Council was reached in February and then endorsed by Member States in March.

A wide range of CDR technologies are emerging with a large variation in their costs but also the removed emission quantities and their permanence. So far, standards for the certification of such removals are set by market platforms, such as Puro Earth or third-party certification schemes, such as Gold Standard or Verra.

The emerging landscape of removal standards complicates their comparability. Also, integrity concerns have been raised. To this end, the CRCF sets consistent rules for the certification of one high-quality standard.

The CRCF goes hand in hand with the EU’s Green Claims Directive. This proposed new law aims to prevent greenwashing by companies. Among other provisions, it requires companies who seek to offset emissions to have these certified under the CRCF.

Ensuring high-quality removals

The framework defines the types of carbon removals eligible for certification and lays out quality standards and processes for monitoring, reporting and verification.

Types of carbon removals

Three distinct carbon removals can be certified under the CRCF:

  1. Permanent carbon removals, such as bioenergy with carbon capture and storage (BECCS), or direct air capture and storage (DACS). Permanent carbon removals should be stored for several centuries. They are measured in permanent carbon removal units.
  2. Carbon storage in long-lasting products, such as wood-based construction materials and biochar. The minimum activity period for this removal type is 35 years. Their climate benefit is measured in carbon storage in products units.
  3. Carbon farming sequestration including emission reductions from soil management, such as restoring forests and soils, rewetting peatlands, and other innovative farming practices. These activities must generate either a removal or soil emissions reduction for a period of at least 5 years. Accordingly, they are measured in soil emission or sequestration units.

To account for the inherent risk of reversal of removed carbon, the carbon farming sequestration units and carbon storage in products units will expire and will be cancelled after the defined monitoring period.

Quality criteria

The key QU.A.L.ITY criteria set out in the regulation are:

  1. Quantification: Correctly assessing the amount of carbon removal is the top priority. CO2 removed or reduced will be measured against a baseline. It will be reviewed at least every 5 years.
  2. Additionality: The CRCF only considers activities that generate removals beyond those accounted under national or EU requirements. Also, the CRCF should generate an additional incentive, so that activities thar are financial profitable without certification and sale of removals are excluded.
  3. Long-term storage: The generated climate benefits need to be permanent by reducing any risk of releasing stored carbon. The requirements for the minimum storage period vary by the type of removal activity.
  4. Sustainability: Removals need to have a neutral or even positive effect on sustainability considerations, such as biodiversity. Removals are required to comply with minimum sustainability requirements which will be set out in future delegated acts.

More to come for implementation

After the adoption, the final legal text is expected to be published by the end of 2024, when it will enter into force. A common EU registry is to be set up within four years of the regulation coming into force. Until then, any certification schemes under the CRCF must run interoperable registries.

In the meantime, the Commission is tasked to develop tailored technical certification methodologies for each removal type with the help of an expert group on carbon removals. Methodologies will be implemented through the future delegated acts.

The Commission is also mandated to assess by 2026 if and how to integrate carbon removals in the EU ETS. The recent Industrial Carbon Management strategy suggests that removals could either be counted against ETS allowances or be covered by a separate compliance mechanism with ETS linking.

In such cases, the voluntary standard laid out by the CRCF could also become a standard for compliance carbon markets.

The Commission is also tasked to assess additional requirements needed to align CRCF with Article 6 of the Paris Agreement. To raise financial incentives for removals, certification standards would optimally also need to fit into such market-based mechanisms at the global level, including voluntary carbon markets.

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Photo by Roman Synkevych on Unsplash