The goal is to incentivize and regulate carbon removal and soil emission reduction activities
In February 2024 (and later in April 2024), the European Parliament and the EU Council reached a preliminary agreement on the proposed Regulation to establish the Carbon Removals Certification Framework (CRCF), the Union’s first voluntary framework for certifying carbon removals (or removals).
As stated in the latest report of the Intergovernmental Panel on Climate Change, removing atmospheric carbon and reducing emissions from the ground are essential activities to combat the climate crisis and achieve climate neutrality by 2050.
EU Path to Lasting Economic Prosperity and Climate Neutrality, 1990-2050. Source: eur-lex.europa.eu
The Scope of the Regulations
The activities covered by this Regulation are divided into three types:
- Permanent carbon storage through industrial technologies. These include practices or processes that have captured and stored atmospheric or biogenic carbon for several centuries, such as bioenergy production with carbon capture and storage (BECCS), direct carbon capture and storage from air (DACCS), and the use of biochar.
- Carbon farming. These activities include the capture and temporary storage of atmospheric carbon in biogenic reservoirs and reduction of emissions from the soil carried out for at least five years through practices such as “afforestation, reforestation and improved forest management, agroforestry, use of intercropping and cover crops; conversion of cropland or areas left fallow to permanent grassland; restoration of peatlands and wetlands.”
- Carbon storage in long-lived wood products, such as wood buildings, for a minimum of 35 years.
Objectives of the European Regulation
The Regulation aims to create anEU-wide scheme, harmonising the various national initiatives of different Member States that have hitherto developed independently with uneven criteria and control methods. Specifically, the Regulation identifies three objectives:
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- Ensure the high quality of carbon removal activities and soil emission reductions within the EU. This objective aims to guarantee greater environmental integrity and transparency in the carbon credit market, counteract greenwashing phenomena and promote the trust of the stakeholders involved, while reducing the administrative costs of certification.
- Create new economic opportunities for industry and managers of agricultural and forestry resources. Certified units can be economically valorised through public and private financing schemes; commercial advantages also arise from consumer choices that reward environmentally friendly practices.
- Increase the resilience of agricultural and forestry ecosystems. For carbon farming activities, this will simultaneously generate significant benefits for biodiversity and other environmental services.
Quality criteria for certification
Carbon removals and soil emission reductions must meet specific requirements to be certified under the proposed EU certification framework. They must have a positive impact on the climate, comply with quality criteria defined by the European Commission, and be verified through independent third-party audits conducted by certification bodies to ensure the credibility and reliability of the certification process.
The quality criteria include accurate and scientifically robust quantification of carbon removals or soil emission reductions, carried out in a relevant and comparable manner; additionality, whereby the activities implemented for the generation of net climate benefits (environmental additionality) and be realised through the incentive effect of certification (financial additionality); long-term carbon storage; and sustainability, according to which the implemented activities must not cause significant harm to the environment (DNSH principle – Do No Significant Harm) and at the same time have the potential to generate co-benefits for multiple sustainability objectives, such as climate change mitigation and adaptation, biodiversity and ecosystem protection and restoration, sustainable use and protection of water and marine resources, transition to a circular economy, and pollution prevention and control.
The Italian context and Etifor’s Contribution
In parallel with the proposed European Regulation, Italy is developing several initiatives to launch a voluntary market for carbon credits regulated at national level, in order to ensure transparency in the sector and guarantee high-quality carbon removals.
On April 21, 2023, law no.41 officially established the National Register of Voluntary Carbon Credits at the Council for Agricultural Research and Analysis of Agricultural Economics (CREA). The aim of this initiative is to incentivise those sustainable management practices, additional to what is required by legislation in the sector, that can stimulate the removal of carbon within agricultural and forest ecosystems.
The use of these credits will be for direct use or sale on the national voluntary market to compensate own or third-party emissions and comply with Italy’s international commitments on greenhouse gas emission removals (however, their use in the EU-ETS and CORSIA markets, which are instead based on mandatory compliance by certain high-emission industries and in the aviation sector, is till now excluded). The valorisation of such carbon removals in the voluntary market would then allow the use of private funds, which would complement other public initiatives (such as the Common Agricultural Policy with its agro-ecological practices, such as Ecoschemes).
Regarding the certification methods and the rules concerning the management of the register within the National Agricultural Information System (SIAN), we now await the official adoption of the National Guidelines – which are the subject of a specific interministerial decree by MASAF (the Ministry of Agriculture, Food Sovereignty and Forestry) and MASE (Ministry of the environment), following an agreement at the State/Regions Conference and a subsequent MASAF provision.. It should be noted, however, that these guidelines have currently only been drafted for the forestry sector, due to the operational and research experience already gained in Italy for this sector.
In this regard, Etifor has made a significant contribution, participating over the years in CREA’s Carbon Monitoring Group for the drafting and revision of the Forest Carbon Code, which has been an important input for the drafting of the Guidelines currently under approval. And the work does not end there. We are working alongside several partners including CREA, the University of Padua, FSC, Lombardy Region, the Municipality of Luvinate, Walden, ERSAF, and ETICAE, within the European #LIFE ClimatePositive project, dedicated to the promotion of innovative financing mechanisms for forest owners and managers based on the valorization of ecosystem services, including carbon. The project serves as an empirical tool for the application and refinement of a transparent and high-quality national carbon certification system, acting as a testing ground for the application of the Italian Guidelines and the future European CRCFs Regulation.