Brussels, 20 February 2024
-
Certification framework to boost high quality carbon removals and counter greenwashing
-
New rules will enable farmers to get paid to remove carbon
-
Minimum sustainability requirements and premium for carbon farming activities with biodiversity co-benefits
-
Public EU registry to ensure transparency
The law will set-up an EU certification framework for carbon removals to boost their uptake and help achieve EU climate neutrality by 2050.
Late Monday night, negotiators from the Parliament and Council reached a provisional political agreement on a new voluntary EU certification framework for carbon removals, which aims to boost their deployment and improve the EU’s capacity to quantify, monitor and verify such activities.
The new law covers different types of carbon removals namely permanent carbon storage, notably through industrial technologies, carbon storage in long-lasting products and carbon farming. The scope was also extended to cover certain types of carbon farming activities that reduce emissions from agricultural soils provided they lead to an overall improvement in the soil carbon balance. The reduction of methane release from enteric fermentation or manure management from livestock will be included as part of the 2026 review.
There will be different units for these different categories due to their differences and environmental impact. Co-legislators tasked the Commission to develop different certification methodologies for these categories stressing that permanent carbon removals must be able to store atmospheric or biogenic carbon for several centuries to be certified and products at least 35 years. Carbon farming activities must be maintained for at least five years.
To promote the sustainable and efficient use of limited biomass resources, the certification methodologies shall ensure consistency with the application of the principle of the cascading use of biomass as laid down in the amended Renewable Energy Directive.
For any activity to qualify for certification it must go beyond both EU and national requirements for individual operators and the incentive effect of the certification must be needed for the activity to become financially viable.
Co-legislators also agreed that all carbon removals and emission reductions generated under this Regulation shall contribute to achieving the EU’s nationally determined contributions (NDCs) under the Paris agreement.
Sustainability requirements
Co-legislators agreed to establish minimum sustainability requirements to ensure that activities do not lead to significant harm to the environment (climate change mitigation and adaptation; biodiversity; the sustainable use and protection of water and marine resources; the transition to a circular economy), whereas carbon farming activities need to at least generate co-benefits for biodiversity and ecosystems. Certified units that generate co-benefits, in particular for biodiversity, must have a higher economic value.
EU registry for carbon removals
To ensure transparency of the scheme, and to avoid the risk of fraud and double counting of carbon removals, the Commission shall establish a public EU registry for carbon removals and soil emission reductions at the latest four years after the entry into force of this Regulation. It must contain the documents related to the certification process, including certificates and summaries of audits.
Quote
After the deal was reached, rapporteur Lídia Pereira (EPP, PT) said: “I am very pleased that the first certification framework for Carbon Removals is about to become a reality. The agreement reached today on this important piece of legislation will make the EU a global leader in carbon removals. It will foster private investment and develop the voluntary carbon markets while respecting climate integrity and preventing greenwashing. I look forward to the final adoption by Parliament and Council before the European elections.”
Next steps
The deal still has to be adopted by Parliament and Council, after which the new law will be published in the EU Official Journal and enter into force 20 days later.
Background
In April 2023, Parliament adopted a resolution on Sustainable carbon cycles saying that while the EU must always prioritise swift and predictable reductions of GHG emissions, carbon removals must play a growing role in achieving EU climate neutrality by 2050 to balance out emissions that cannot be eliminated.
This legislation responds to citizens’ expectations concerning climate change and the environment as expressed in proposal 1(5) of the conclusions of the Conference on the Future of Europe where they call for the introduction of “a certification of carbon removals, based on robust, solid and transparent carbon accounting”.
Further information
EU Council background: on EU carbon removals certification framework
Council and European Parliament negotiators reached a provisional political agreement today on a regulation to establish the first EU-level certification framework for carbon removals. The voluntary framework is intended to facilitate and speed up the deployment of high-quality carbon removal and soil emission reduction activities in the EU.
Once entered into force, the regulation will be the first step towards introducing a comprehensive carbon removal and soil emission reduction framework in EU legislation and contribute to the EU’s ambitious goal of reaching climate neutrality by 2050, as set out in the European climate law.
The deal reached today is provisional, pending formal adoption by both institutions.
Main elements of the agreement
Scope of the regulation
The agreement extends the scope of the regulation to soil emission reductions and maintains an open definition of carbon removals, in line with that used by the UN Intergovernmental Panel on Climate Change (IPCC). It also differentiates between the following carbon removal and emission reduction activities and 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) 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 reductions from soil management and, as long as such activities result, overall, in an improvement in the soil carbon balance, wetland management, no tilling and cover crop practices combined with reduced use of fertilizer, etc.
The last two 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 is 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 nitrous oxide). 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 in order 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, with a view to ensuring the correct, harmonised and cost-effective implementation of the carbon removal criteria. The co‑legislators have made some changes to define more precisely on the basis of which criteria the methodologies must be developed and included a list of indications as to which activities should be prioritised.
The co-legislators agreed to maintain the key elements of the two-step 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 allow synergies between the CAP’s identification system for agricultural parcels (LPIS) and the information generated by the certification process under this framework.
Use of units
The provisional agreement sets out rules on the registration and issuance of the units (corresponding to one tonne of certified net benefit generated by one of the carbon removal or soil/agricultural emission reduction activities) in the public registries and, when developed, the EU registry.
The co-legislators have agreed to include that the certified units can only be used for the EU’s climate objectives and nationally determined contribution (NDC) and should not contribute to third countries’ NDCs and international compliance schemes. These rules, including on 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.
EU registry
The text agreed by the co-legislators calls on the Commission to establish a common and transparent electronic EU-wide registry four years after the entry into force of the regulation to make information on the certification and units publicly available and accessible, including certificates of compliance and summaries of certification audits. Until then, certification schemes under the framework must provide public registries based on automated and interoperable systems. The co-legislators also introduced rules on the financing of the EU registry, which will be funded by annual fixed user fees that are proportionate to the use of the registry.
Next steps
The provisional agreement will now be submitted for endorsement to the member states’ representatives in the Council (Coreper) and to the Parliament’s environment committee. If approved, the text will then need to be formally adopted by both institutions, following revision by lawyer-linguists, before it can be published in the EU’s Official Journal and enter into force.
Background
While the EU’s priority with regard to climate action is the rapid reduction of GHG emissions, in order to achieve climate neutrality by 2050, it will also need to compensate for residual hard-to-abate emissions by scaling up carbon removals from the atmosphere. As a first step towards the further integration of carbon removal schemes into EU climate policy, on 30 November 2022, the European Commission proposed a regulation creating a voluntary EU-wide framework to certify high-quality carbon removals.
The objective of the proposal is to encourage the development of carbon removal technologies and sustainable carbon farming solutions. It also aims to create new income opportunities for industries deploying carbon removal technologies or developing long-lasting carbon storage products, and for land managers engaging in innovative carbon farming practices. To that end, it sets out clear and reliable rules at EU level to quantify, monitor and verify carbon removals.
The Council adopted its negotiating mandate at Coreper level on 17 November 2023, while the European Parliament reached its position on 21 November 2023.
- Council negotiating mandate
- Climate neutrality: Council ready to start talks with Parliament on EU carbon removals certification framework (press release, 17 November 2023)
- Commission proposal for a regulation on a Union certification framework for carbon removals
- Carbon removals (background information)
- Climate neutrality (background information)
Commission welcomes political agreement on EU-wide certification scheme for carbon removals