The CDR sector is calling for the Green Claims Directive to recognize the role of climate claims in driving investment in permanent and high-integrity carbon removal, as long as this does not hinder or reduce a company's absolute emissions reduction target.
Reducing greenhouse gas emissions remains the most direct and effective way to slow climate change and should be the main focus of the EU's climate action. However, a rapid decarbonization of our economy is unfortunately no longer sufficient. Each of the 230 scenarios the IPCC has modeled to limit global warming to less than 1,5°C includes carbon dioxide removal (CDR) at scale, ranging from 6 to 10 Gt of CO2 removed per year by 2050.
The IPCC report clearly states that: “The commitment to carbon dioxide removal to offset the difficult-to-reduce residual emissions is inevitable if we are to achieve net-zero emissions of carbon dioxide or greenhouse gases,” i.e. to achieve the ambitious net-zero emissions of To achieve the EU's objectives, short-term investments in high-quality, permanent carbon removal should be stimulated.
Given the current regulatory framework, the only source of revenue for carbon removal relies on state subsidies and voluntary carbon markets. Policymakers should seek to ban greenwashing while facilitating short-term, high-integrity carbon removal purchases.
Corporate environmental claims play a crucial role in purchasing and investment decisions on carbon removal, and appropriate rules regarding claims at company level should be put in place to incentivize investments in high-integrity, permanent carbon removal (CDR).
Companies should be incentivized to purchase high-integrity carbon removals, provided these claims are transparent and do not hinder or diminish absolute emissions reduction efforts and targets. It is crucial that companies make compensation claims in relation to these purchases, as companies' climate ambition is often measured against their efforts to achieve their net zero targets. This will encourage investment in the emerging carbon removal market and support the EU's negative emissions target.
While we support the aim of recent EU legislation to prevent greenwashing and increase transparency around climate-related claims, we are concerned about the lack of clarity of the current legislative process.
Several pieces of EU law currently address carbon credit claims:
The rules currently being developed do not universally encourage short-term CDR purchases or investment in this sector. It is therefore important that rules around climate claims are designed to support CDR development on a large scale. This uncertainty hinders ambitious EU policy goals and the European Commission's goal to accelerate the deployment of negative emissions. As a result, this could hinder the EU's progress in achieving its climate goals in the coming decades.
The role of each of these pieces of legislation in regulating climate claims based on carbon credits should be clarified, and any overlapping provisions harmonized to reduce the administrative burden on companies complying with these provisions.
We therefore propose that the Green Claims Directive recognizes the role of climate claims in encouraging investment in permanent and high-integrity carbon removal, as long as this does not hinder or reduce a company's absolute emissions reduction target.
We therefore urge policymakers to:
Allow corporate-level climate claims based on high-quality removals of residual emissions, defined as unabated emissions when the annual potential for economically reasonable reduction measures in the value chain has been exhausted, ensuring that offset measures do not hinder or reduce the achievement of greenhouse gas emissions reduction targets. Companies should transparently report where they have used permanent disposal credits and describe how the removals do not reduce emissions reduction efforts.
Allowing green claims based on permanent removal of these residual emissions (year after year by applying economically reasonable measures to achieve reductions across the value chain) increases ambition as it incentivizes companies to immediately take additional responsibility for their gross emissions, rather than applying an ineffective traditional offset tool.
This is in line with the provisions set out in the European Sustainability Reporting Standards (ESRS), which requires companies to explain any green greenhouse gas neutrality claims that carbon offsets entail, demonstrate the integrity of the offsets used and prove that this does not hinder the achievement of greenhouse gas emissions. reduction targets. Companies must explain whether and how these claims are accompanied by emissions reduction targets.
Ensure that removal credits are based on high-quality removals of carbon from the atmosphere/biosphere, with an increasing emphasis on permanent removals over time, taking into account the like-for-like principle.
Assess how credits for carbon removals from outside the EU will be treated in the EU market, as the scope of the CRCF will be limited to carbon removals within the EU.
Source: Bioenergyeurope.org
