The EU Carbon Certification Removal Framework and its methodologies must be improved to deliver on their goals

In our assessment, the proposed methodologies not only fail to align with the requirements under the Paris Agreement, but also set a lower standard than the current practice in the voluntary carbon market. While the aim is for the CRCF to contribute to achieving the EU’s climate goals, the current framework and proposed methodologies could generate low quality units and undermine the EU’s climate mitigation efforts. We call for the CRCF to be aligned with the Paris Agreement when it is reviewed in 2026 and for the proposed methodologies to be significantly improved, drawing on the wealth of experience and lessons learned from existing schemes. We cannot afford to repeat the mistakes of the past.

Carbon removals need to be considerably scaled up to achieve the goals of the Paris Agreement. Technical removals are still in their infancy. To bring them to scale, we need to invest in them now. At the same time, the potential of natural removals is uncertain as climate change may undermine the ability of forests to absorb carbon dioxide (CO₂). Creating incentives for enhancing carbon removals is therefore critical in order for the EU to deliver on its climate goals.

Creating such incentives is the goal of the new EU regulation for the certification of carbon removals and soil emission reductions (CRCF) that is expected to enter into force in December 2024. The regulation will make carbon removal and soil emission reduction units available to buyers and thereby aims to generate funding for carbon removal activities in the EU. In October 2024, the European Commission presented the first draft methodologies, or elements thereof, for certifying such units for six types of mitigation activities. The methodologies specify how CRCF units should satisfy the four quality principles under the CRCF: additionality, quantification, permanence and sustainability.

We are concerned that both the CRCF regulation and the proposed methodologies set a low standard that is not fit for purpose. The methodologies fail to align with the requirements of Article 6 of the Paris Agreement and non-governmental standards such as the Core Carbon Principles (CCPs) of the Integrity Council for the Voluntary Carbon Market (ICVCM). Worse still, the approaches also fall short of requirements under the Clean Development Mechanism (CDM) and the current practice in the voluntary carbon market – a market that is already upset by integrity concerns. In this blogpost, we unpack why the CRCF and the proposed methodologies are not fit for purpose and we make recommendations on ways in which they should be improved.

1. Do not reward past climate action

If policymakers were to design a scheme to incentivise the purchase of electric vehicles, would you expect them to give bonuses to car owners who bought their cars five years ago? Probably not. Yet that is what could happen under the CRCF. The proposed methodologies allow CRCF units to be issued for actions taken in the past. Some methodologies do this explicitly; others lack requirements to limit eligibility to new mitigation activities.

These past actions were undertaken regardless of the incentives provided by the CRCF – and are therefore not additional. For this reason, it is best practice in carbon crediting programmes, such as the Article 6.4 mechanism of the Paris Agreement and the CDM, to limit eligibility to those activities that have notified or publicly documented their intention to receive credits prior to the decision to proceed with the mitigation activity. This practice should also be implemented under the CRCF.

2. Introduce robust additionality tests

None of the six proposed methodologies provides for a robust assessment of additionality. Where standardised baselines are used, the CRCF assumes that mitigation activities are additional – i.e. that they are implemented due to the incentives created by the CRCF – if they perform better than the average existing practice. Such benchmarking works for some mitigation activities and sectors, but not for others. For example, the level of existing carbon stocks on degraded land (the standardised baseline) has no bearing on whether CRCF revenues are needed to make tree planting economically viable (additionality).

Many of the eligible mitigation activities are already being implemented in the EU. As the proposed methodologies allow certification for any improvement in the sector’s average current performance, all farmers or foresters with an emissions or removals balance better than average values could receive CRCF units for continuing with business as usual. In addition, some methodologies allow CRCF units to be issued for practices that are required by law. All of this is in stark contrast to the requirements of the Article 6.4 mechanism, the ICVCM or the CDM.

If non-additional CRCF units can be used to offset emissions in other sectors, it will result in higher overall emissions to the atmosphere. However, even if CRCF units are not used for offsetting, but rather as a tool to disburse funds, such funds should be allocated to mitigation activities that truly need them, rather than rewarding business-as-usual.

3. Revise accounting of biomass

Some activities may not result in any removals. The proposed methodologies give credit for enhancing the storage of biomass – in geological reservoirs through biomass carbon capture and storage (Bio-CCS), in buildings, and in soils through the application of biochar. Removals occur as biomass grows in forests or on agricultural land.

However, harvesting more biomass in order to store it in buildings or soils does not necessarily bring about a climate benefit. Shifting carbon from one pool (forests) to another (buildings) may not result in any removals; rather, it could actually increase emissions due to losses in processing the biomass and the energy required to produce biochar. Similarly, simply diverting biomass from its current use (e.g. co-firing in a coal power plant) to a new use (e.g. biochar production) may not result in additional climate benefits.

We believe that the approach to accounting for biomass needs to be reconsidered. Consistent with the practice of many existing carbon crediting methodologies, we recommend that CRCF methodologies only allow the use of biomass residues or wastes, i.e. biomass that would not be used in the baseline scenario but would decay, or biomass from sustainably managed new forests that are established on unused degraded land.

4. Consider other public funding in allocating carbon credits

The eligible mitigation activities are also often subsidised by other public support schemes, such as the EU’s Common Agriculture Policy (CAP). If mitigation activities receive both public subsidies and CRCF units, public subsidies would artificially lower the price of CRCF units and thus subsidise the users of the units. This would lead to economic inefficiencies and could indirectly subsidise the continued use of fossil fuels by the users of the units, such as voluntary carbon market buyers or – if CRCF units were to become eligible in the EU Emissions Trading System (ETS) – the operators covered by the EU ETS. To avoid such unintended outcomes, the methodologies should either exclude mitigation activities funded by other public support schemes or proportionally attribute the removals or emission reductions to the financial support provided. This could be achieved by drawing on approaches developed for the Swedish Energy Agency and the World Bank Group.

5. Revise quantification approaches to avoid over-crediting

The methodologies also lack robust approaches for quantifying removals and soil carbon emission reductions. Key lessons from 20 years of carbon crediting are not appropriately taken into account. For example, some methodologies provide considerable flexibility in how removals or emission reductions may be quantified. Project operators may choose which emission factors to use instead of being required to use conservative default values. It is well documented that this can lead to a systematic selection of quantification methods that result in more credits. Some methodologies also fail to account for indirect land-use change, which can be a major source of emissions and is required to be considered under the Article 6.4 mechanism, the ICVCM and the CDM. For example, rewetting of peatlands which were used as crop- or grasslands before could lead to relocating these agricultural activities elsewhere and thus increase emissions. The materiality thresholds are another source of potential overestimation as they do not require that projects include all relevant emission sources and sinks in the calculation of removals or emission reductions. The methodology on biochar does not require emissions from the production and transport of biomass feedstocks that are used to produce biochar to be considered, for example. Similarly, accounting for emissions from the production of fertiliser is not mandatory in the methodology on soil carbon in mineral soils and agro-forestry. The methodologies should also be improved in terms of their structure, clarity, definitions, and appropriate cross-referencing to regulatory documents, standards and literature.

6. Elaborate approaches to address non-permanence

All eligible activities under the CRCF are subject to the risk that the stored carbon could be released again at a later point in time, due to human-induced interventions (e.g. decommissioning of buildings) or natural disturbances (e.g. forest fires). However, not all methodologies elaborate procedures to reduce the risk of reversals and to compensate for reversals. None of the methodologies has procedures to compensate for monitored reversals that occur after the end of the crediting period. It is also not clear how temporary credits from carbon farming activities or carbon stored in buildings will be replaced when they expire. Overall, the approaches to non-permanence require considerable further elaboration.

Conclusion: The CRCF could undermine EU climate action and must be improved

The shortcomings of the CRCF and the proposed methodologies could undermine the EU’s ability to fulfil its removal targets and ultimately its Nationally Determined Contribution (NDC) under the Paris Agreement. This is particularly the case if the units became eligible for compliance purposes, such as under the EU ETS or the EU Effort Sharing Regulation (ESR). But even if the units were only used to disburse funds to farmers or foresters, such funding would be ineffective. Since many units would not be backed up by actual enhancements in removals or soil emission reductions, there is a risk that funding would mostly be provided for business-as-usual. As there is no cost to continuing with business-as-usual, this would create a 'lemons market' in which business-as-usual activities would outcompete those activities that urgently need the funding to move forward. Not only would the scheme create ‘hot air’ units, it would also fail to provide the necessary incentives to enhance removals and reduce soil carbon emissions in the EU. In its current form, the CRCF is not fit for purpose.

We recommend that the CRCF and the proposed methodologies are considerably improved to make sure that CRCF units constitute actual enhancements in removals or reductions in soil carbon emissions. The CRCF Regulation foresees a review by the co-legislators in 2026 to align the CRCF with the requirements of Article 6 and best practice in the voluntary carbon market. At the same time, the proposed methodologies should be significantly improved during the ongoing legislative process before they are adopted as delegated acts in 2025. Once an improved CRCF is in place, the methodologies should also be updated to create a standard that is truly high-integrity.

The underlying assessment was commissioned by Carbon Market Watch. It represents the views of the authors only and not necessarily the views of Carbon Market Watch.

This blogpost was written by Lambert Schneider, Anne Siemons, Felix Fallasch, Hannes Böttcher, Klaus Hennenberg and Anke Herold.

Further Information

• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Cross-cutting findings applicable to all six assessed methodologies” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Biochar” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Long-term temporary biogenic carbon storage in buildings” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Peatland rewetting” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Permanent carbon removals through DACCS/BioCCS” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Planting of trees on unused and severely degraded land” by Oeko-Institut
• Policy Brief “Assessment of the draft technical specifications for certification under the EU CRCF – Soil carbon in mineral soils and agro-forestry” by Oeko-Institut