The EU's Carbon Removal Certification Framework (CRCF)

Key Takeaways

• While the EU Green Deal was a huge win in setting out how we would achieve net zero by 2050, it didn't include carbon dioxide removal (CDR), meaning that CDR is not integrated into key policy vehicles.
• This is a problem as CDR could be the solution to ramp up decarbonisation, with estimates that we need to grow CDR 40%+ year on year for the next 26 years.
• To solve this, the EU has released the Carbon Removal Certification Framework, a unified certification scheme, which can easily be adopted into EU national climate policy and by the voluntary carbon market, allowing buyers to align their behaviour with the framework, driving up demand for quality CDRs.

Why do we need the Carbon Removal Certification Framework?

As mentioned CDR needs to grow significantly to meet the EU net-zero targets. The European Union is addressing this challenge with the Carbon Removal Certification Framework (CRCF), aimed at standardising carbon removal efforts.

Currently, the CDR certification landscape is fragmented with dozens of schemes and varying definitions, methodologies, and verification processes. This fragmentation means there is no one accepted standard for the accurate measurement, reporting, and verification of carbon removal activities, giving rise to issues like double counting and greenwashing, undermining markets’ trust of carbon removal credits quality, and ultimately roadblocking climate policy goals.

Why are we talking about the Carbon Removal Certification Framework?

On February 20, 2024, a crucial agreement was reached during the final Trilogue, when the three EU institutions - Parliament, Council, and Commission - reached an agreement on the legal text of the CRCF. A critical step in the formal adoption and implementation of the CRCF, this agreement highlights the EU's desire for a high-quality and inclusive carbon removal certification process.

What is the Carbon Removal Certification Framework (CRCF)?

First introduced by the European Commission in 2022, the CRCFs goal is to create a unified certification scheme for CDR. What is a unified certification scheme? The idea is to create a single set of standards that CDR credits need to meet to prove it genuinely contributes to environmental sustainability.

The CRCF categorises carbon removal into three key approaches:

1. Nature-based carbon farming: such as soil carbon and afforestation/reforestation and other innovative farming practices.
2. Permanent Carbon Storage/Removal such as Biochar Carbon Removal (BCR), Direct Air Capture and Storage (DACS), Enhanced Rock Weathering (ERW), and Bioenergy with Carbon Capture and Storage (BECCS)
3. Carbon Storage in Products such as wood-based construction materials and concrete.

The CRCF also includes a "QU.A.L.ITY" criteria—Quantification, Additionality, Long-term Storage, and Sustainability—which each approach needs to meet.

In time the CRCF will:

• Define the structure of CDR certification bodies
• Investigate how a unified European registry can be implemented to prevent double counting and monitor CDR throughout the Union.
• Specify how certification will occur for each different carbon removal approach with accompanying methodology.

What is the CRCF's Role in EU Climate Policy & the ETS?

By providing a quality assurance mechanism for CDR credits, the CRCF is set to significantly influence EU climate policy, as different countries can adopt the standard into their own national policies. The net effect of this could be extreme alignment of policy across the EU, creating momentum and positive market conditions for CDR.

The potential integration of CDR into the  Emission Trading Scheme (ETS) post-2030 would again create positive signals to the market, increasing supply and demand for quality CDR credits. Beyond the EU, this could potentially set a global standard for CDR certification.

What's next for the CRCF after this agreement?

With an agreement reached at the final Trilouge, the focus is now shifting to developing detailed methodologies for certifying carbon removal activities. It's expected to be formally adopted in April at the EU Plenary, and then after the development of further details which will progress through to the end of 2025. Despite facing legislative hurdles and industry pushback, the CRCF's comprehensive approach aims to maintain an inclusive and effective framework for the future.

Senken’s take

• Companies can confidently report their progress towards net zero goals using CRCF carbon dioxide removal credits, knowing that their efforts are backed by transparent and reliable verification processes embodied in the CRCF. This transparency is crucial for stakeholder trust and can strengthen a company's reputation in the market.
• Companies investing in CRCF verified CDR credits, can leverage this as a competitive advantage, differentiating a company in the market by appealing to environmentally conscious consumers and partners who increasingly demand transparency on quality of company sustainability actions.
• The CRCF isn't perfect. It includes some vague areas in distinguishing between removals and emissions avoidance such as including project sectors like regenerative agriculture, which is predominantly an avoidance activity, but has some removal components.