Commission Welcomes Political Agreement on EU-Wide Certification Scheme for Carbon Removals

February 26, 2024

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(European Commission) The Commission welcomes the provisional agreement between the European Parliament and the Council on the first EU-wide voluntary framework for the certification of high-quality carbon removals. This certification framework will boost innovative carbon removal technologies and carbon farming which contribute to the EU's climate, environmental and zero-pollution goals. This new framework will help the EU to reach climate neutrality by certifying carbon removals and carbon farming to ensure that they are transparent and trusted, preventing greenwashing and creating new business opportunities. Today's agreement sets out certification rules for:

Carbon farming, such as restoring forests and soils and avoiding soil emissions, rewetting of peatlands, more efficient use of fertilizers, and other innovative farming practices;
Industrial carbon removals, such as bioenergy with carbon capture and storage, or direct air carbon capture and storage;
Binding carbon in long-lasting products and materials, such as wood-based construction materials or biochar.

The provisionally agreed Regulation will improve the EU's capacity to quantify, monitor and verify the authenticity of all these forms of carbon removals. In particular, it sets out rules to recognise certification schemes that demonstrate compliance with the EU framework, and a specific set of criteria to ensure the high-quality of carbon removals and the transparency and credibility of the certification process.

The agreed criteria will ensure that carbon removals are: correctly quantified; store carbon for an agreed long-term period (a minimum of 35 years for carbon stored in products); go beyond existing practices and don't just reward the status quo; and contribute to broader sustainability goals, for instance by providing positive impacts on biodiversity. An EU registry will be established to create a-high level of transparency about certified carbon removals. This will be put in place within 4 years. In the meantime, the registries of existing certification schemes can be used. The Regulation provides a prioritisation of the certification methodologies that should be developed. On this basis, the Commission, supported by a Carbon Removal Expert Group, will continue its work to develop credible and tailored certification methodologies for the different types of carbon removal activities.

Certified carbon removals can be the basis of new economic opportunities, and can be monetised through private schemes and public sector support, as well as generating commercial advantages with consumers looking to reward environmentally-friendly practices. Carbon farming will create new business models for farmers and foresters and is expected to yield significant benefits for biodiversity. The agreed regulation also encourages the use of long-lasting bio-based building products to keep carbon bound over several decades or longer, stimulating new sustainable building techniques.

Regarding financial support for carbon removing technologies, the Regulation unlocks innovative private and public financing, including impact finance or result-based public support, because carbon removers and carbon farmers can be rewarded based on the certified removals and emissions reductions. It will also support the New European Bauhaus by recognising the carbon storage capacity of bio-based and energy-efficient building materials. The Commission will continue funding carbon removals through various programmes, such as the Innovation Fund, Common Agricultural Policy, Regional Development Fund, LIFE programme and Horizon Europe programme (including the Mission ‘A Soil Deal for Europe').

Next steps

The European Parliament and Council now need to formally approve the agreement. Once this process is completed, the new legislation will be published in the Official Journal of the Union and enter into force.

Background

The European Climate Law, signed in 2021, legally binds the EU to become climate neutral by 2050. This means achieving a balance between greenhouse gas emissions and removals by 2050. The Carbon Removal Certification Framework Regulation, initially proposed by the Commission in November 2022, is therefore crucial to achieve the EU's long-term climate objective under the Paris Agreement and make the European Green Deal a reality. Carbon removals will be a key enabler for a future intermediate climate target for 2040, as recommended by the Commission in its Communication and the Industrial Carbon Management Strategy on 6 February.

Building upon the Commission's Communication on Sustainable Carbon Cycles adopted in 2021, this Regulation contributes to the 2030 carbon removals target in the Land Use, Land Use Change and Forestry (LULUCF) sector. It also supports the nature restoration activities in line with the Nature Restoration Law and circular economy practices from the Circular Economy Action Plan.

It will also help companies in reporting their climate footprint in accordance with the Corporate Social Responsibility Directive and the related Sustainability Reporting Standards, and it will provide more transparency on climate neutrality claims by public and private organisations.

For More Information

Commission's proposal
Carbon Removal Certification
The European Green Deal

Quote(s)

Our efforts to reduce greenhouse gas emissions will increasingly depend on technology and innovation in the future, and on making the best use of natural carbon sinks. Developing the appropriate certification for carbon removal technologies and carbon farming is key to incentivising and rewarding new practices. Today’s agreement sets us on a path to establishing high quality carbon removal activities across Europe.

Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight

Carbon removals and carbon farming will be an important part of our efforts to reach climate neutrality by 2050. With this new voluntary European certification framework for carbon removals and carbon farming, we will be unlocking new economic opportunities for farmers, foresters, builders and innovators. It's essential that we work with all these stakeholders for a more sustainable future where innovation meets environmental responsibility. Together we can create an innovative business environment to invest in and deploy high-quality carbon removals.

Wopke Hoekstra, Commissioner for Climate Action

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Council and Parliament reach provisional deal on EU Carbon Removal Certification Framework (Bioenergy International)
EU reaches deal on world’s first carbon removal certification scheme (EurActiv)
The EU is formalizing rules for taking CO2 out of the atmosphere (The Verge)

Excerpt from Bioenergy International: The regulation will include an open definition of carbon removals in line with the UN Intergovernmental Panel on Climate Change (IPCC), and which only covers atmospheric or biogenic carbon removals.

The Carbon Removal Certification Framework will cover the following carbon removal and emission reduction activities and differentiate between four corresponding types of units:

permanent carbon removal (storing atmospheric or biogenic carbon for several centuries);
temporary carbon storage in long-lasting products (such as wood-based construction products) of a duration of at least 35 years and that can be monitored on-site during the entire monitoring period;
temporary carbon storage from carbon farming (e.g. restoring forests and soil, wetland management, seagrass meadows);
soil emission reduction (from carbon farming) which includes carbon and nitrous oxide (NOx) reductions from soil management, and which activity must overall reduce the carbon emissions of soils or increase carbon removals from biological matter. Examples of activities are wetland management, no tilling and cover crop practices, reduced use of fertilizer combined with soil management practices, etc.

Compared to the Commission’s proposal this means an extension of the scope of the regulation to soil emission reductions.

Temporary carbon storage from carbon farming and soil emission reduction activities must last at least five years to be certified and must not lead to land being acquired for speculative purposes negatively affecting rural communities.

By 2026, the Commission will be tasked with producing a report on the feasibility of certifying activities that result in the reduction of emissions other than those related to soils (carbon and NOx).

The report will be based on a pilot certification methodology for activities that reduce agricultural emissions from enteric fermentation and manure management.

Activities that do not result in carbon removals or soil emission reductions, such as avoided deforestation or renewable energy projects, are not included in the scope of the regulation.

The co-legislators also agreed to exclude enhanced hydrocarbon recovery from the permanent carbon removal activities and to explicitly clarify that activities and operators in the marine environments are included in the scope of the regulation.

The new rules will apply to activities taking place in the EU. However, when reviewing the regulation, the Commission should consider the possibility of allowing geological carbon storage in neighbouring third countries, provided that those countries align with EU environmental and safety standards.

Certification criteria and procedure

The provisional agreement maintains the Commission proposal’s requirement that carbon removal activities need to meet four overarching criteria to be certified: quantification, additionality, long-term storage, and sustainability.

Based on these criteria, the Commission, assisted by an expert group, will develop tailored certification methodologies for different types of carbon removal activities, to ensure the correct, harmonized- and cost-effective implementation of the carbon removal criteria.

The co‑legislators have made some changes to define more precisely based on which criteria the methodologies must be developed and included a list of indications as to which activities should be prioritized.

The co-legislators agreed to maintain the key elements of the certification process and the voluntary nature of certification but included further clarification as to how the certification process works.

On sustainability for carbon farming, the co-legislators have added indications on how the sustainability objectives must be understood and have included that a carbon farming activity must always generate at least a biodiversity co-benefit, including soil health and avoidance of land degradation.

For carbon farming activities, the provisional agreement gives member states the possibility to provide advice to farmers on the application procedure and allows for synergies between the Common Agricultural Policy’s identification system for agricultural parcels (LPIS) and the information generated by the certification process under this framework.

Carbon net benefit

Carbon net benefits will generate units corresponding to one metric tonne of carbon dioxide equivalent (CO2eq) of certified net benefit generated by one of the carbon removal or soil emission reduction activities.

The co-legislators have further agreed to include that the certified units can only be used for the EU’s climate objectives and Nationally Determined Contribution (NDC) and must not contribute to third countries’ NDCs and international compliance schemes.

These rules, including the corresponding adjustments, will be reviewed in 2026.

Monitoring and liability

The regulation sets out clear monitoring obligations and liability rules for operators.

The negotiators agreed to distinguish between the activity period and the monitoring period (which always covers at least the activity period) and clarified that operators will be liable to address any cases of reversal (i.e. the release of CO2 back into the atmosphere) stemming from a carbon removal activity during the monitoring period.

The agreement calls on the Commission to include clear liability mechanisms when developing the certification methodologies.

The liability mechanisms should address cases of reversal and the consequences of incomplete or interrupted monitoring and non-compliance by the operators during the monitoring period.

They may include collective buffers or accounts of carbon removal units and up-front insurance mechanisms. READ MORE