Proposal for EU certification framework for carbon removals can now proceed to trilogues

On 21 November 2023, the European Parliament agreed its negotiating position on a Commission Proposal for a new EU certification framework for carbon removals. The Council agreed on its negotiating mandate on 17 November 2023, which means that negotiations (trilogues) between EU co-legislators can now commence. 

Commission’s proposal

The European Commission revealed its Proposal for a carbon removal certification framework on 30 November 2022, which outlined a voluntary framework for certifying carbon removals created in Europe and established criteria for high-quality carbon removals. It also provided guidelines for monitoring, reporting, and verifying of the robustness of these removals. The certification and verification processes should help avoid greenwashing and attract private investment in carbon removal projects within the EU. This is intended to support the EU’s goal of climate neutrality by 2050 as it balances out greenhouse gas (GHG) emissions which cannot be eliminated. The Proposal did not address fossil carbon capture for storage or utilisation (CCUS), nor did it provide for any rules for trading the carbon removal certificates. 

Carbon removal activities

The Proposal envisaged three primary methods of carbon removal:

• Permanent storage: industrial technologies such as BECCS (bio-energy with carbon capture and storage) or DACCS (Direct Air Capture with Capture and Storage), capture carbon from the air either indirectly (through processing biomass in the case of BECCS) or directly (in the case of DACCS) and store it in a stable form;
• Carbon farming: carbon can be naturally stored on land through activities that enhance carbon capture in soils and forests (e.g. agro-forestry, forest restoration, improved soil management) and/or reduce the release of carbon from soils to the atmosphere (e.g., restoration of peatland); 
• Carbon storage in products: atmospheric and biogenic carbon captured by trees or industrial technologies can also be used and stored in long-lasting products or materials, such as wood-based or carbonate-bonded construction materials.

The Council wants to extend the scope of certifiable activities to include certain types of carbon farming activities that reduce emissions from agricultural soils, provided they result in an overall improvement in the soil carbon balance. It also suggested including activities in marine environments. Activities that do not result in carbon removals or soil emission reductions, such as avoided deforestation or the reduction of livestock emissions, are not included in the scope of the proposed Regulation.

The Parliament intends to distinguish the definitions, quality criteria, and the usage rules concerning carbon removals, carbon farming and carbon storage in products due to their different characteristics and environmental impact.

Certification

For certification, carbon removal and soil emission reduction activities must meet four criteria: Quantification, Additionality, Long-term storage, and Sustainability (QU.A.L.ITY).

The Parliament proposes that carbon farming should result in emission reductions for at least five years and not negatively affect the EU’s food security or lead to land grabbing or land speculation. In addition, the certification of carbon storage in products should initially be limited to harvested wood products or construction materials that store carbon for at least 50 years.

The Commission, based on the QU.A.L.ITY criteria, will develop tailored technical certification methodologies for different types of carbon removal and soil emission reduction activities. Parliament also suggests establishing a Platform on Carbon Removal, Carbon Farming and Carbon Storage in Product Activities. This platform would comprise experts from academia, civil society, and stakeholders, including farmers and forest owners, who will monitor trends and advise the Commission on the technical certification methodologies.

The Council has proposed changes to more accurately define the scope of the delegated acts that will develop these methodologies and to better consider the specific characteristics of the activities covered by the Regulation. The Parliament emphasised that the methodologies must align with international and scientific standards.

To apply for certification, operators must submit information on the relevant activity and its compliance with the QU.A.L.ITY criteria to a certification body. This body will conduct an independent audit to verify the information and issue a certificate. The certification body must perform regular recertification audits at least every five years. The Parliament wants recertification audits to occur at least every five years for carbon farming activities and at least every ten years for other activities, following a risk-based approach.

The Council wants the Commission to establish an electronic EU-wide registry to store documents related to the certification process four years after the Regulation comes into force. The Parliament is also calling for the creation of an EU registry. Until then, the certification schemes under the framework must provide public registries based on automated and interoperable systems.

The Council wants the Commission to review the Regulation by 2028 and subsequently after each stocktaking exercise under the Paris Agreement. The Parliament proposes that the Commission should be obligated to report on the need for a legislative proposal on the establishment of EU targets for permanent carbon removals and for land-based sequestration as part of the post-2030 EU climate framework.

Next steps

Trilogue negotiations can now start, and it’s likely that the co-legislators could reach political agreement before the European Parliament elections in June 2024. The agreed text will then need to be formally approved by both the Parliament and the Council and published in the Official Journal of the EU. 

The EU certification framework for carbon removals will be fully operational once the Commission has adopted the first certification methodology and recognised the first certification scheme. Further EU guidance is expected to cover the use of the certificates for purposes such as offsetting and corporate reporting.