Brussels: Europe and the Arabs
Negotiators of the Council of Member States and the European Parliament have reached a provisional political agreement on a regulation to create the first EU-wide certification framework for decarbonisation. The Voluntary Framework aims to facilitate and accelerate the deployment of high-quality decarbonisation and soil emissions reduction activities in the EU.
Once in force, the Regulation will be the first step towards introducing a comprehensive framework for decarbonisation and soil emissions reductions into EU legislation and contribute to achieving the ambitious EU target of reaching climate neutrality by 2050, as set out in European climate law.
The agreement reached at dawn on Tuesday is a temporary agreement, pending its official approval by the two institutions.
The European statement included the main elements: “The agreement expands the scope of the regulation to include the reduction of soil emissions and maintains an open definition of carbon removal operations, in line with the definition used by the United Nations Intergovernmental Panel on Climate Change (IPCC). It also differentiates between carbon removal and emissions reduction activities.” The following and four types of corresponding units:
Permanent carbon removal (storing atmospheric carbon or biocarbon for centuries)
Temporary carbon storage in long-lasting products (e.g. wood-based construction) for a minimum of 35 years that can be monitored on site during the entire monitoring period
Carbon buffering from carbon farming (e.g. forest and soil restoration, wetland management, seagrass meadows)
Reducing soil emissions (from carbon farming) which includes carbon and nitrous oxide reductions from soil management, as long as these activities lead, in general, to improved soil carbon balance, wetland management, no-tillage, and cover crop practices along with reduced Fertilizer use, etc.
The latter two activities must continue for at least five years in order to be approved and must not lead to the acquisition of land for speculative purposes that negatively impacts rural communities.
By 2026, the Commission is mandated to produce a report on the feasibility of certifying activities that reduce emissions other than those related to soil (carbon and nitrous oxide). The report will be based on a pilot methodology for certification of activities that reduce agricultural emissions from enteric fermentation and manure management.
Activities that do not decarbonize or reduce soil emissions, such as avoiding deforestation or renewable energy projects, are not included in the scope of the regulation. The participating legislators also agreed to exclude enhanced hydrocarbon recovery from permanent carbon removal activities and clearly state that activities and operators in marine environments are included in the scope of the regulation.
The new rules will apply to activities taking place in the European Union. However, when reviewing the regulation, the Commission should consider the possibility of allowing geological carbon storage in neighboring third countries, provided that those countries comply with EU environmental and safety standards.
Certification standards and procedures
The interim agreement maintains the requirements of the Commission's proposal that carbon removal activities must meet four overarching criteria in order to be certified: quantification, addition, long-term storage and sustainability.
Based on these standards, the Commission, with the assistance of a team of experts, will develop customized certification methodologies for different types of decarbonization activities, with the aim of ensuring the correct, coordinated and cost-effective implementation of decarbonization standards. Participating legislators made some changes to more precisely define the criteria upon which methodologies should be developed, and included a list of indicators on which activities should be prioritized.
The participating lawmakers agreed to maintain the basic elements of the two-step certification process and the voluntary nature of certification, but provided further clarification on how the certification process works.
Regarding the sustainability of carbon farming, participating legislators added indicators on how to understand sustainability objectives, and included that a carbon farming activity should always generate at least a co-benefit for biodiversity (including soil health and avoiding land degradation).
For carbon farming activities, the Interim Agreement gives Member States the possibility to advise farmers on application procedures and allows for synergies between the Common Agricultural Policy (LPIS) Farmland Identification System (LPIS) and information generated from the certification process within this framework.
Monitoring and responsibility
The Regulation sets out clear monitoring obligations and liability rules for operators. Negotiators agreed to distinguish between an activity period and a monitoring period (which always covers at least the activity period) and made it clear that operators would be responsible for addressing any adverse events (i.e. release of carbon dioxide back into the atmosphere) resulting from decarbonisation activity during the monitoring period.
The agreement calls on the Committee to include clear accountability mechanisms when developing certification methodologies. Liability mechanisms should address rollbacks, consequences of incomplete or intermittent monitoring and non-compliance by operators during the monitoring period. They may include collective reserves or decarbonisation unit accounts, and ex ante insurance mechanisms.
European Union register
The text approved by co-legislators calls on the Commission to establish a common and transparent EU-wide electronic registry four years after the regulation enters into force to make information on certificates and units publicly available and accessible, including compliance certificates.