Regulation (EU) 2024/3012 of the European Parliament and of the Council of 27 November 2024 establishing a Union certification framework for permanent carbon removals, carbon farming and carbon storage in products

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 192(1) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national Parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

(1) Under the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (UNFCCC) (the ‘Paris Agreement’), which was approved by means of Council Decision (EU) 2016/1841 (4), the international community has agreed to hold the increase in the global average temperature well below 2 oC above pre-industrial levels and to pursue efforts to limit the temperature increase to 1,5 oC above pre-industrial levels. The Conference of the Parties to the UNFCCC also adopted the Glasgow Climate Pact on 13 November 2021, which acknowledges that the impact of climate change will be much lower at a temperature increase of 1,5 oC, compared with 2 oC, and resolves to pursue efforts to limit the temperature increase to 1,5 oC. The Union and its Member States are Parties to the Paris Agreement and are strongly committed to its implementation by reducing greenhouse gas emissions and by increasing carbon removals.

(2) On a global scale, the reports by the Intergovernmental Panel on Climate Change (IPCC) point towards a decreasing likelihood of limiting global warming to 1,5 oC unless rapid and deep cuts in global greenhouse gas emissions occur throughout the remainder of this decade and in the coming decades. The IPCC reports also clearly state that the deployment of carbon dioxide (CO2) removal to counterbalance hard-to-abate residual emissions is unavoidable if net-zero CO2 or greenhouse gas emissions are to be achieved. This will require the large-scale deployment of sustainable activities for capturing CO2 from the atmosphere and durably storing it in geological, terrestrial or marine reservoirs, including oceans, or in long-lasting products. Today and with current policies, the Union is not on track to deliver the required carbon removals: carbon removals in terrestrial ecosystems have been decreasing in recent years, and no significant industrial carbon removals are currently taking place in the Union.

(3) The aim of this Regulation is to develop a voluntary Union certification framework for permanent carbon removals, carbon farming and carbon storage in products (the ‘Union certification framework’), with a view to facilitating and encouraging the uptake of high-quality carbon removals and soil emission reductions, in full respect of the Union’s biodiversity and the zero-pollution objectives, as a complement to sustained emission reductions across all sectors. The Union certification framework will thus be a tool to support the achievement of the Union objectives under the Paris Agreement, in particular the collective achievement by 2050 of the climate-neutrality objective laid down in Regulation (EU) 2021/1119 of the European Parliament and of the Council (5). All carbon removals and soil emission reductions certified under the Union certification framework should contribute to the achievement of the Union’s nationally determined contribution (NDC) and its climate objectives. Therefore, in order to avoid double counting, those carbon removals and soil emission reductions should not contribute to third-party NDCs or international compliance schemes. The Union also committed to generating negative emissions after 2050. An important instrument to enhance carbon removals in terrestrial ecosystems is Regulation (EU) 2018/841 of the European Parliament and of the Council (6) on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry (LULUCF) in the 2030 climate and energy framework, which sets out a Union target for net removals of 310 million tonnes of CO2 equivalent by 2030 and allocates targets to each Member State.

(4) In its communication of 6 February 2024 entitled ‘Towards an ambitious Industrial Carbon Management for the EU’, the Commission envisages assessing overall objectives for carbon removal needs in line with the Union’s 2040 climate ambition and the goal to reach climate neutrality by 2050 and negative emissions thereafter; developing policy options and support mechanisms for industrial carbon removals, including if and how to account for them in the Union emissions trading system; and in parallel, boosting Union research, innovation and early-of-a-kind demonstration for novel industrial technologies to remove CO2 under Horizon Europe, the framework programme for research and innovation established by Regulation (EU) 2021/695 of the European Parliament and of the Council (7), and the Innovation Fund established by Directive 2003/87/EC of the European Parliament and of the Council (8). In addition, it is appropriate that the Commission assess options for Union targets for carbon removals, including clearly setting a separate target for permanent carbon removals.

(5) A harmonised Union certification framework is expected to enhance the environmental integrity and transparency of permanent carbon removals, carbon farming and carbon storage in products and promote trust in their certification, while reducing the associated administrative costs. The voluntary nature of the Union certification framework means that existing and new public and private certification schemes will be able to apply for recognition by the Commission under this Regulation but will not be obliged to do so in order to operate in the Union.

(6) Regulation (EU) 2021/1119 also sets out a binding Union climate target of a domestic reduction of net greenhouse gas emissions by at least 55 % compared to 1990 levels by 2030. In order to ensure that sufficient mitigation efforts are deployed up to 2030, the contribution of net removals to the Union 2030 climate target is limited to 225 million tonnes of CO2 equivalent.

(7) The Union certification framework will support the development of permanent carbon removals, carbon farming and carbon storage in products in the Union that result in an unambiguous positive climate impact, while avoiding greenwashing. In the case of carbon farming, the Union certification framework should also promote the uptake of activities that generate co-benefits for biodiversity, thereby contributing to achieving the nature restoration targets set out in Union law.

(8) It is appropriate that the Union certification framework also encourage research and innovation, including by emphasising the role of relevant research programmes, with the aim of facilitating access to the market for new technologies. In this regard, the Commission and the Member States are encouraged to engage in cross-disciplinary cooperation, involving national and regional research institutions, scientists, farmers and small and medium-sized enterprises.

(9) In order to support operators willing to make additional efforts to increase carbon removals or reduce soil emissions in a sustainable way, the Union certification framework should take into account the different types of activities, their specificities and the related environmental impact. Therefore, this Regulation should provide clear definitions of permanent carbon removals, carbon farming and carbon storage in products, and other elements of the Union certification framework. Its scope should include activities that enhance carbon storage in geological, terrestrial or marine reservoirs, including oceans, and in long-lasting products. Activities should include one or more practices or processes that remove carbon from the atmosphere. Certain activities, such as those based on the use of biochar, can result in different types of net carbon removal benefits and durations of carbon storage, depending on the specific conditions under which the activities take place. Accordingly, appropriate monitoring and liability rules should be set out in the applicable certification methodologies to be established at Union level pursuant to this Regulation.

(10) In the case of carbon farming, relevant activities can include practices and processes carried out in marine and coastal ecosystems. Relevant activities can also include practices or processes that reduce greenhouse gas emissions from soils or result in the reduction of carbon release into the atmosphere from soil carbon pools as listed in Section B, points (e) and (f), of Annex I to Regulation (EU) 2018/841, as is the case, for instance, for activities that improve soil management or restore degraded peatlands. In addition, reductions of emissions from agricultural soils, corresponding to the emissions from the IPCC source category of agriculture, subcategory of agricultural soils, as reported in table 3.D of the common reporting format tables under the UNFCCC reporting guidelines on annual inventories for Parties included in Annex I to that Convention, should also be included in the quantification of carbon farming activities as long as those emission reductions result from an activity that, overall, reduces the emission of carbon from soil carbon pools or increases carbon removals in biogenic carbon pools. On the contrary, activities which do not result in either carbon removals or soil emission reductions, such as avoided deforestation projects or renewable energy projects, should not be included in the scope of the Union certification framework.

(11) This Regulation should set out the requirements under which carbon removals and soil emission reductions are eligible for certification under the Union certification framework. To that end, carbon removals and soil emission reductions should be quantified in an accurate and robust way, and should be generated only by activities that generate a net carbon removal benefit or a net soil emission reduction benefit, are additional and aim to ensure long-term storage of carbon. They should do no significant harm to the environment and should be able to result in a co-benefit in relation to sustainability objectives. Carbon removals and soil emission reductions should be subject to independent third-party auditing carried out by certification bodies in order to ensure the credibility and reliability of the certification process. Furthermore, this Regulation should set out rules on the issuance and use of certified units.

(12) Mandatory Union carbon pricing rules established through Directive 2003/87/EC regulate the treatment of emissions from activities covered by that Directive. This Regulation should be without prejudice to Directive 2003/87/EC, except in relation to the certification of capture and storage of CO2 emissions from biofuels, bioliquids and biomass fuels that meet the sustainability and greenhouse gas emissions saving criteria established under Directive (EU) 2018/2001 of the European Parliament and of the Council (9), with any necessary adjustments for application under Directive 2003/87/EC, as set out in the implementing acts referred to in Article 14 of Directive 2003/87/EC, in accordance with Annex IV to Directive 2003/87/EC.

(13) An activity should result in a net carbon removal benefit or a net soil emission reduction benefit, thereby showing that it delivers a positive climate impact. The net carbon removal benefit or the net soil emission reduction benefit should be quantified following two steps.

(14) In the first step for quantifying the net carbon removal benefit or the net soil emission reduction benefit, operators should quantify the amount of additional carbon removals or soil emission reductions that an activity has generated in comparison to a baseline. In the case of carbon farming, the manner of quantification of carbon removals or soil emission reductions should ensure that any carbon release occurring in a carbon pool is taken into account in an appropriate way in quantifying the net benefit of the activity. The certification methodologies should establish standardised baselines which should be highly representative of the standard performance of comparable practices and processes in similar social, economic, environmental, regulatory and technological circumstances and take into account the geographical context, including local pedoclimatic and regulatory conditions. This approach to establishing the standardised baselines should be preferred because it ensures objectivity, minimises compliance and other administrative costs, and recognises positively the action of first movers who have already engaged in eligible activities. In the context of carbon farming, only practices and processes that go beyond the common practice should be certified. Therefore, a specific carbon farming activity should not be rewarded if it is already widely adopted within a region with similar pedoclimatic and regulatory conditions. The standardised baselines should ensure that, once an activity becomes the common practice, such activity can no longer be certified. To that end, the Commission should review at least every five years and update, where appropriate, the standardised baselines in light of evolving regulatory circumstances and of the latest available scientific evidence, to reflect social, economic, environmental, regulatory and technological developments and to encourage increased ambition over time in line with the Paris Agreement. In addition, the use of available digital technologies, including electronic databases and geographic information systems, remote sensing, novel on-site carbon quantification systems, artificial intelligence and machine learning, and of electronic maps should be promoted to decrease the costs of establishing standardised baselines and ensure the robustness of the monitoring of the activities. However, where it is not possible to set such standardised baselines, an activity-specific baseline based on the operator’s individual performance should be used. The activity-specific baselines should be updated by the operator at the beginning of each activity period, unless otherwise stated in the applicable certification methodologies.

(15) The second step for quantifying the net benefit should consist of subtracting any associated greenhouse gas emissions occurring during the lifecycle of the activity and related to the implementation of the activity. Relevant greenhouse gas emissions that should be taken into consideration include direct emissions, such as those resulting from the use of fertilisers, chemicals, fuel or energy, other material inputs and transportation, or indirect emissions, such as those resulting from land use change with consequent risks for food security due to displacement of agricultural production, or displacement effects due to competing demand for energy or waste heat. Any increase in greenhouse gas emissions attributable to the implementation of the activity should be subtracted from the net carbon removal benefit or from the net soil emission reduction benefit in an appropriate way, in accordance with the technical rules set out in the applicable certification methodology. Reductions in greenhouse gas emissions resulting from the implementation of the activity, with the exception of the reduction of soil emissions from agricultural soils, should not be taken into account to quantify the net carbon removal benefit or the net soil emission reduction benefit, but should be considered to provide a co-benefit towards the sustainability objective of climate change mitigation and be reported on the certificates of compliance. Such reductions in greenhouse gas emissions, like the other sustainability co-benefits, could increase the value of the certified carbon removals or soil emission reductions.

(16) Operators carrying out activities covered under this Regulation should include any natural or legal person or public entity operating or controlling an activity, or to which or to whom decisive economic power over the technical functioning of the activity has been delegated. In the case of carbon farming, the definition of ‘operator’ should apply to ‘farmer’ as defined in Article 3, point (1), of Regulation (EU) 2021/2115 of the European Parliament and of the Council (10), to any other manager of an activity in a terrestrial or coastal environment, to a forest owner or manager as defined by national law, or to a competent public entity. ‘Group of operators’ should cover any legal entity that represents at least two operators, including cooperatives or producer organisations or producer groups, and ensures that those operators comply with this Regulation.

(17) An activity delivers a net carbon removal benefit when the carbon removals above the baseline exceed any increase in greenhouse gas emissions associated with the implementation of that activity. For instance, in the case of permanent carbon removals that inject carbon underground, the amount of permanently stored carbon should exceed the energy-related greenhouse gas emissions from the industrial process. Similarly, in the case of soil emission reductions through carbon farming, the net soil emission reduction benefit is positive if the soil emission reductions compared to the baseline exceed any increase in greenhouse gas emissions associated with the implementation of the activity. Carbon farming activities generally improve soil quality, which has a positive impact on soil resilience and productivity, but in some circumstances they might also generate a decrease in food production and therefore lead to a carbon leakage effect from indirect land use change, and accordingly the related indirect emissions should be taken into account. Any carbon captured and stored by afforestation or soil emission reduction by means of peatland re-wetting should exceed the emissions from the machinery used to carry out the activity or the indirect land use change emissions that could be caused by carbon leakage.