COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a Union certification framework for carbon removals
Date: 2022-11-30
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU environmental policy, carbon capture and storage, climate change, economic instrument for the environment, environmental law, greenhouse gas, joint implementation, pollution control measures, reduction of gas emissions

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   EUROPEAN COMMISSION  Brussels, 30.11.2022  SWD(2022) 378 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a Union certification framework for carbon removals {COM(2022) 672 final} - {SEC(2022) 423 final} - {SWD(2022) 377 final}  
 
 
Limiting the global average temperature increase to below 1.5° Celsius will require deep cuts in global 
GHG  emissions  throughout  the  forthcoming  decades.  To  achieve  this,  first  we  need  to  improve  the 
efficiency  of  our  buildings,  transport  modes  and  industries,  to  move  to  a  circular  economy,  and  to 
massively  scale  up renewable  energy.  Second,  we  need  to  recycle carbon  from  waste  streams,  from 
sustainable sources of biomass or directly from the atmosphere, to use it in place of fossil carbon in the 
sectors  of  the  economy  that  will  inevitably  remain  carbon  dependent,  for  instance  thorough  carbon 
capture  and  use  (CCU)  and  sustainable  synthetic  fuels.  In  parallel,  as  also  underlined  by  the  IPCC, 
increasing amounts of CO2 will have to be captured and removed each year from the atmosphere 
by carbon farming and industrial removal activities to reach the 2050 climate neutrality goal set out in 
the European Climate Law1. This objective requires that both natural ecosystems and industrial solutions 
should contribute to removing several hundred million tonnes of CO2 per year from the atmosphere. To 
this  end,  the  Commission  Communication  on  Sustainable  Carbon  Cycles  stresses  the  importance  of 
enabling  a  business  model  that  rewards  land  managers  for  carbon  sequestration  in  full  respect  of 
ecological principles (‘carbon farming’), and of creating an EU internal market for capture, use, 
storage and transport of industrial CO2 through innovative technologies. 

In this context, the present initiative introduces a regulatory framework for the certification of carbon 
removals.  A  large  majority  (89%)  of  the  stakeholders  that  replied  to  the  public  consultation  (which 
received  400  replies  and  140  position  papers)  agreed  that  “that  establishing  a  robust  and  credible 
certification  system  for  carbon  removals  is  the  first  essential  steppingstone  towards  achieving  a  net 
contribution  from  carbon  removals  in  line  with  the  EU  climate-neutrality  objective”.  This  impact 
assessment report assesses policy options for such EU certification framework to address three main 
problems impacting the future development of carbon removals. 

The  first  problem  is  the  difficulty  to  assess  and  compare  the  quality  of  carbon  removals,  which 
creates significant search costs for potential financiers of carbon removals. This is a typical ‘market 
failure’ and creates a risk that financial support goes to carbon removal activities that cannot be relied 
upon  as  effective  mitigation  actions.  This  problem  has  two  drivers.  The  first  driver  is  the  fact  that 
certification of carbon removals is much less common than that of emission reductions; it also involves 
several methodological challenges, and different certification schemes propose different methodologies 
to  quantify  total  and  additional  carbon  removals,  to  incentivize  long-term  storage  of  carbon,  and  to 
encompass broader sustainability impacts (e.g. biodiversity) of the carbon removal activity. The second 
driver is that carbon removal solutions (i.e. solutions storing carbon in geological formations, such as 
bioenergy with carbon capture and storage or direct air carbon capture and storage, carbon farming, and 
carbon storage products) pose different challenges for certification and are very heterogeneous in terms 
of their maturity, cost-effectiveness and related monitoring costs.  

To address this problem, this initiative aims to guarantee the quality of all carbon removals certified in 
the EU through certification methodologies that are tailored to the specific circumstances of different 
carbon  removal  solutions. To this end, the  Commission  is  proposing  an  EU  quality  standard for the 
certification  of  carbon  removals  along  four  quality  criteria  (under  the  acronym  of  QU.A.L.ITY): 
QUantification,  Additionality  and  baselines,  Long-term  storage  and  sustainabilITY.  The  proposed 
Regulation  indicates  best  practices  for  each  of  these  criteria  building  on  relevant  legislation,  while 
recognising  that  the  essential  elements  to  address  the  QU.A.L.ITY  criteria  will  differ  across  carbon 
removal solutions. In a second step, detailed certification methodologies to implement the QU.A.L.ITY 
criteria across the different carbon removal activities will have to be developed. In this step, specific 
rules will be tailored to the characteristics of the different types of carbon removal activities: for instance, 
the rules will recognise the strong guarantees for permanence offered by solutions storing carbon in 
geological  formations,  while  clarifying  minimum  sustainability    requirements  for  carbon  farming 

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https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021R1119  

Regulation (EU) 2021/1119,  

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activities.  In this respect, this Impact Assessment compares two Quality options: under the first option 
(option Q1), certification schemes develop methodologies in line with the EU QU.A.L.ITY criteria and 
submit them for recognition to the responsible public authority; under the second option (option Q2), 
the Commission develops the methodologies in close consultation with an expert group.  

The analysis in this Impact Assessment concludes that option Q2 has the largest potential to guarantee 
the  quality  of  carbon  removal  certificates  and  to  improve  their  comparability,  while  minimising  the 
administrative costs of developing or approving methodologies for certification schemes. 

The  second  problem  is  that  many  stakeholders  do  not  trust  carbon  removal  certificates  because 
certificates may be generated through unreliable certification processes which certify activities that are 
not  delivering  true  climate  and  sustainability  benefits.  To  tackle  this  problem,  certification  schemes 
should put in place transparent and robust rules and procedures to mitigate the risks that the certification 
process is  not  able to  detect  low-quality  removals,  that  the  carbon  removal  projects  are  not  actually 
delivering  the  removals  as  planned,  and  that  the  same  project  is  certified  twice,  or  that  the  same 
certificate is used twice.  

The third problem is that the providers of carbon removals face barriers to access finance. This is 
driven by the fact that there is a wide variety of ways to use carbon removal certificates (e.g. voluntary 
carbon  markets,  public  funding,  inclusion  of  sustainability  in  corporate  reporting  and  in  contractual 
arrangements, voluntary labels). This diversity creates transaction costs for those that want to have their 
carbon removal activity certified, such as search costs (the time and effort spent to understand the quality 
of the certification procedures of a given scheme) and switching costs (the cost of trying to raise other 
complementary or alternative types of funding, which is likely to require changing their operations and 
providing a different set of evidence and information).   

To  address  the  second  and  the  third  problems,  the  certification  schemes  should  comply  with  three 
Transparency requirements: scheme management (certification schemes should be operated on the basis 
of reliable and transparent procedures, e.g. internal management and monitoring, complaints and appeal 
management, stakeholder consultation, transparency and publication of information, etc.); Independent 
verification (the compliance of the carbon removals with the QU.A.L.ITY criteria should be verified by 
third-party  auditors); and full  disclosure (all information  on  the  certified  carbon  removals  should be 
publicly available and traceable through public registries). In line with these Transparency criteria, a 
process to recognise certification schemes is set out and only recognised certification schemes can be 
used by the providers of carbon removals to demonstrate compliance with the QU.A.L.ITY criteria and 
the relevant certification methodologies.  

In  this  context,  the  Impact  Assessment  compares  two  Governance  options  as  to  who  would  be 
responsible for recognising certification schemes: the Member States (option G1) or the Commission 
(option G2). The analysis concludes that option G2 performs best in terms of guaranteeing a robust and 
harmonised certification process and promoting the internal market for carbon removal certification, 
while minimising the administrative costs for public authorities. 

In  conclusion,  the  preferred  policy  option  is  one  where  the  Commission:  (i)  develops  certification 
methodologies, in consultation with experts and stakeholders; and (ii) harmonises the implementation 
of the certification framework and of the QU.A.L.ITY criteria through recognised certification schemes.  

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