The European Union’s new Carbon Removal Certification Framework (CRCF)¹ is a legislative framework that will govern the generation of carbon removal and emission reduction certificates from various activities. These activities include carbon farming (sequestering carbon in soils and forests, as well as cutting emissions), carbon storage in products and removing carbon from the air using technologies such as direct air capture. The final legislation has not changed fundamentally from the European Commission’s proposal.² In April, the European Parliament approved the framework, which now awaits the final rubberstamp of the Council, expected by June 2024. 

The CRCF puts the EU’s approach to climate action in the agriculture sector on a concerning path. Because the EU often sets trends globally, its policies can influence other regions. This analysis provides an overview of the CRCF, especially its impact on food and agriculture.

Key takeaways of the final legislation are:  

Delayed climate action through offsetting: The CRCF generally allows polluters to use certificates as carbon credits to offset emissions, which can delay necessary emissions cuts. This goes against the principle that carbon removals should add to, not replace, direct efforts to reduce emissions. The use of CRCF credits, including the extent of allowable offsetting, will need to be determined for each market where these credits are used, from voluntary to compliance markets.

Ample supply of credits: The final CRCF encompasses a wider range of activities than the original proposal by broadening the scope of emission reductions from agriculture, leading to a larger supply of carbon credits that might drive down the price of credits and further delay climate action.

Greenwashing on voluntary carbon markets: The use of CRCF credits on voluntary carbon markets will be governed by EU consumer protection legislation. These laws will likely limit, but not entirely prohibit, climate claims based on offsetting. In fact, the CRCF might become the main standard for voluntary carbon markets for companies operating in the EU.

Supports the establishment of an emissions trading system for agriculture: The CRCF could be used as a critical steppingstone towards an EU carbon market for food and agriculture that risks delaying emission reductions and entrenching the industrial agri-food system.

Limited and uncertain effectiveness of safeguards: EU legislators created the so-called “QU.A.L.ITY” criteria (QUantification, Additionality, Long-term storage and sustainabilITY) to avoid worthless and harmful certificates. However, these “fixes” do not resolve the fundamental problems of including agriculture in a carbon credit framework.³ How well they work depends on how they are implemented and enforced. For example: 

• Temporary certificates for carbon farming create governance challenges: The CRCF will create certificates with expiration dates to deal with the fact that carbon stored in soils and forests can be released back into the atmosphere. This approach was unsuccessful in past carbon markets and creates challenges for the governance of the framework, e.g., to ensure that expired certificates are cancelled from all registries. 
• Rules for obligatory positive biodiversity co-benefits for carbon farming are still to be determined: Perhaps the most critical improvement of the CRCF is the obligation for farming and forestry activities to have a positive co-benefit on the “protection and restoration of biodiversity and ecosystems including soil health, as well as avoidance of land degradation.” Yet, how these criteria will work in practice and how they will be enforced will determine how effectively they can rule out harmful activities. 
• Distorting rules on baselines and additionality: Allowing offsetting necessitates strict requirements, such as ensuring additionality (that is, an activity would not have happened otherwise) and establishing robust baselines. The CRCF breaks with carbon market standards by not requiring the usual additionality tests, and its baseline rules risk crediting potentially nonexistent climate benefits or issuing two credits for the same benefit. 
• No operationalized safeguards against land speculation or farmers’ liability: The CRCF acknowledges the risks that a carbon market schemes brings for farmers on the ground, including land speculation and rocketing land prices due to the perspective of financial gains from carbon credits, as well as the liability of farmers if carbon storage is reversed. Yet, the framework does not address these aspects, which will only be resolved in the CRCF’s methodologies or not at all. 
• Risk of double claiming: The CRCF allows credits to be used for the EU’s climate targets, as well as in corporate accounts. This could disincentivize additional climate action from all stakeholders, which is one of the promises of voluntary carbon markets.

The CRCF represents a troubling shift in EU climate policy, focusing more on carbon offsetting than on making real, systemic changes and cutting emissions.

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Endnotes

1. European Commission, “Commission welcomes political agreement on EU-wide certification scheme for carbon removals,” February 20, 2024, https://ec.europa.eu/commission/presscorner/detail/en/ip_24_885 (accessed May 16, 2024).
2. Scherger, S., Sharma, S., “Twelve problems with the European Commission’s proposal for a Carbon Removal Certification Framework,” Institute for Agriculture and Trade Policy, March 19, 2023, https://www.iatp.org/twelve-problems-ec-crcf (accessed May 16, 2024).
3. Dufranse, G., Lickel, S., Castagné, M., Ritter, T., “Carbon Markets and Agriculture,” November 24, 2020, Carbon Market Watch, Secours Catholique, CCFD-Terre Solidaire, Institute for Agriculture and Trade Policy, https://www.iatp.org/carbon-markets-and-agriculture (accessed May 16, 2024). 

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