EU agrees carbon removals certification framework

Europe's legislators forged a deal Feb. 20 to establish an EU-level certification framework for carbon removals and carbon farming in a bid to accelerate its net-zero goals, the European Council said.

The provisional agreement sets a path for the EU to create the world's first registry for dioxide carbon removals and scale up this nascent sector.

Carbon removals, also known as CO2 removal, or CDR, refers to climate mitigation strategies that remove CO2 emissions from the atmosphere, as opposed to strategies to avoid such emissions.

The popularity of carbon removals is on an upward trend despite some debate. Critics argue many CDR technologies are untested and expensive.

Definitions, registry details

The regulation on carbon removals contains definition differentiating activities relating to permanent carbon removal, temporary carbon storage in long-lasting products, temporary carbon storage from carbon farming and soil emission reduction (from carbon farming).

CDR is an umbrella term for strategies to reverse greenhouse gas emissions, often subdivided into nature-based approaches, such as reforestation and tech-based approaches. The latter makes up a sliver of today's carbon credits marketplace but has drawn increasing investment from the developers looking for more permanent ways to offset emissions.

The provisional agreement deals also includes rules on the registration and issuance of the units, corresponding to 1mtCO2e 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 European Council said in a statement.

The EU-wide registry will be established four years after the regulation is passed, it added.

MEP Lídia Pereira, the European Parliament's special rapporteur on this framework, said this deal will help prevent greenwashing and foster private investment in carbon removals and develop voluntary carbon markets.

Co-legislators "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 statement added.

The provisional agreement will now be submitted for endorsement to the member states' representatives in the European Council and to the Parliament's environment committee. If approved, the text will then need to be formally adopted by the European Council and the European Parliament.

Industrial carbon strategy

On Feb. 6, the EU released its Industrial Carbon Management strategy, which emphasized the need for accelerated deployment of carbon capture and storage if the bloc is to achieve net zero. Around 280 million mtCO2e would have to be captured by 2040, rising to 450 million mtCO2e by 2050, according to the document.

"The scale of this endeavor is large. Storing 50 million mtCO2e in 2030 is the equivalent of the annual CO2 emissions of Sweden in 2022 . Industry stakeholders expressed that, by 2030, they could capture up to 80 million mtCO2e per year in Europe if the necessary investment conditions are in place," it said.

CO2 removal methods are "unavoidable if net-zero CO2" emissions are to be achieved, according to the Intergovernmental Panel on Climate Change.

The IPCC also said CDR technologies will need to account for around 6 gigatons/year of CO2 globally by 2050, roughly equivalent to US annual emissions today.

Platts, part of S&P Global Commodity Insights, assesses the prices of carbon credits generated from technology-based carbon credits like direct air capture projects or other carbon capture and storage operations.

Platts CRC, which represent standard carbon removal credits, was assessed at $12.95/mtCO2e Feb. 19, S&P Global data showed.