Europe encourages carbon removal with a stick, rather than a carrot

The European Union is encouraging its carbon removal market with regulation rather than financial reinforcement, but experts believe the policy framework will establish trust in a market that could otherwise greenwash climate action.

In November, the EU announced a new regulatory framework for carbon removal companies called the Carbon Removal Certification Framework (CRCF). The aim is to provide a trustworthy certification process for all carbon removal technologies and help secure the science behind a growing market.

The framework proposal has been criticized for lacking detail and stringent definitions that would ensure technologies are removing what they say they are removing. But specialists are optimistic the final product will reflect the necessary changes and boost the market as a result. 

"There’s a sense that regulation can be a barrier," said Josh Burke, a senior policy fellow at the Grantham Research Institute on Climate Change and the Environment. "But good regulation can be a driver of innovation and market creation."

The need to boost carbon removal

In January, a study showed that only a tiny fraction (0.1 percent) of carbon removal from the atmosphere is a result of new carbon dioxide removal (CDR) technologies. The rest (99.9 percent) comes from nature-based removal approaches linked to changes in land or forest management. Experts said a rigorous certification process such as the one proposed by the EU could be one ticket to boosting the industry.

The EU has a strong track record for creating climate-related regulatory frameworks. In 2005, it established the EU Emissions Trading System (EU-ETS), which requires European companies to purchase credits to emit, and it provides an overall cap on the continent’s emissions. Currently, carbon removals issued under the CRCF would not be tradeable under the EU-ETS, however, industry professionals see potential to connect those regulatory systems.

There’s a sense that regulation can be a barrier. But good regulation can be a driver of innovation and market creation.

"[The carbon removal market] could be part of ETS where removals are something that need to be bought by emitters," said Harald Bier, secretary-general of the European Biochar Industry Consortium (EBI), which supports companies using this type of carbon removal in Europe.

The European Commission has said that their goal is for the CRCF to "accelerate the deployment of high-quality carbon removals, build trust with stakeholders and industry by countering greenwashing and enable a wide variety of financing options," according to a spokesperson for climate action at the European Green Deal Team.

"They are using [CRCF] to establish more trust in the market," echoed Sebastian Manhart, senior policy adviser at Carbon Future, a company that tracks carbon removals and translates them into credits. "A key barrier is that there’s a lot of risk involved. The CRCF is allowing the carbon removal market to get out of the starting gates."

A need for clarity

Still, the framework is lacking in some crucial areas, according to experts. One main complaint is that the definition of carbon removal does not sufficiently differentiate between removal and reduction, according to Manhart. In order to account for approaches such as peatland restoration, which transitions from restoration to removal over time, the definition of removal is too broad, he said.

A second area in need of clarity is what qualifies as permanent. The CRCF creates three distinct categories: carbon storage in products, which include materials such as wood-based construction; carbon farming, which refers to natural solutions such as afforestation or reforestation; and permanent carbon storage, which encapsulates the industrial solutions. 

All three categories fall under "carbon removal activity," defined in the CRCF as "practices or processes carried out by an operator resulting in permanent carbon storage." However, experts point out that carbon farming is not a permanent solution. 

Manhart said the categories set out by CRCF are dangerous and arbitrary. Not only do they create a false assumption that naturally stored carbon is permanent, but they also don’t leave room for solutions that may not fit into these categories, Manhart said.

Currently, the CRCF proposal only approves two so-called "permanent" removal solutions: Bioenergy with carbon capture and storage (BECCS) and direct air capture with carbon storage (DACCS), which both store CO2 underground.

"The challenge people have — including myself — is that [the framework] is currently limited only to technologies storing CO2 in geological reservoirs or formations," Manhart said. "This is extremely limited as it only applies to BECCS and some forms of DACCS. It excludes other permanent [carbon dioxide removal], for example, all of the biochar carbon removal, which is the leading CDR method in the world, and enhanced rock weathering."

Nowhere in the world has anyone tried to define what high-quality removal is. It’s hard to do this, but done well it could be very, very powerful.

Biochar turns biomass into solid carbon, and enhanced rock sequestration assists natural processes of rocks breaking down and reacting with water to capture carbon dioxide.

Manhart suggested that the CRCF categorize the methods of removal based on whether they can permanently remove carbon from the atmosphere, rather than the ways in which they remove.

Lacking direction

Experts are also concerned with how carbon removal credits might be counted and used based on these vague definitions. Eli Mitchell-Larson, co-founder, chief science and advocacy officer for the NGO Carbon Gap, said if someone emits fossil fuels by flying a plane, for example, they shouldn’t be able to offset those fuels with an impermanent storage method such as planting a tree.

"It has to be like-for-like," said Mitchell-Larson. "If you’re emitting fossil fuels and you want to compensate for that by planting trees, that’s not fair compensation." 

Experts and industry professionals see this oversight as a loophole for greenwashing, according to Johan Börje, who works in business development at carbon capture and storage company Stockholm Exergi. "There needs to be a credit for what is permanent and a credit for what is not permanent," he said. "If we start to mix that, we are on a very slippe

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