Europe leads the way on carbon markets with CRCF
EU's Council, Parliament and Commission agree to establish a carbon removals certification framework
Last week European Parliament, Council, and Commission - reached an agreement on the legal text for EU’s Carbon Removal Certification Framework (CRCF).
The framework includes the following
Permanent carbon removal - includes activities usually referred to as DACS (direct air capture and storage) and BECCS (bioenergy with carbon capture and storage)
Temporary carbon storage in long-lasting products - includes “supply chain carbon”, such as wood-based construction products
Temporary carbon storage from carbon farming such as restoring forests and soil, wetland management, seagrass meadows
Soil emission reduction (from carbon farming) which includes carbon and nitrous oxide reductions from soil management
We wrote about CRCF in more detail back in December 2022, when Commission first published a draft proposal. We have updated that overview with the latest including our thoughts what’s still missing and how it will impact forest carbon removal.
Below is what our co-founder Kristjan had to say on CRCF:
While there is a lot of legalese around the agreed text (and more to come), the summarising story is very short and clear - Europe is becoming the leader in creating a clear framework for carbon markets.
Last year was not easy for carbon markets, there were many cases of faulty projects being published. But those are the growing pains of every new market and this is now being used to make this market better. The carbon buyers will need more transparency of the projects and to be sure that they really do good for the nature. Farmers and foresters need more security that the new carbon markets will be there in 10 years as well. The CRCF ensures both.
What happens next?
While this was an important and strong step, there is still a lot of work ahead to get this usable to businesses in Europe. There are two important next steps:
An EU-wide registry will be developed in four years from the adoption of the regulation. Meanwhile other registries can be used.
The Commission's expert group will start working on methodologies for these different types of carbon removal activities. It is still unclear how long this will take.
When will CRCF be fully operational?
EU policy expert Eve Tamme estimated “So, the earliest in 2025, possibly in 2026.” While it will still take some time, we are really moving fast and inching closer. For example, methodologies will be prepared by the Commission's expert group meeting will take place April and will no doubt provide more detail such as which methods will receive methodologies first.
“Over time, this will create an important additional business model for farmers and foresters,” commented Wopke Hoekstra, the EU’s climate commissioner.
While we already help European landowners with afforestation, there is more legal support needed to ensure landowners and credit buyers. That is why the agreement was an important step. Once CRCF is live, it will bring transparency and trust, allowing European carbon markets to explode in size.