This article focuses on carbon removals in the context of the Article 6.4 mechanism under the Paris Agreement

<p>The UN standard-setters are continuing their deliberations on removals under the Paris Agreement. The upcoming&nbsp;<a href="https://unfccc.int/event/Supervisory-Body-5" target="_blank" rel="noreferrer noopener">5th meeting</a>&nbsp;of the&nbsp;<a href="https://unfccc.int/process-and-meetings/bodies/constituted-bodies/article-64-supervisory-body" target="_blank" rel="noreferrer noopener">Article 6.4 Supervisory Body</a>&nbsp;has a busy agenda and&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb005-aa-a09.pdf" target="_blank" rel="noreferrer noopener">one particular document</a>&nbsp;has&nbsp;<a href="https://www.linkedin.com/posts/evetamme_carbonremoval-article6-parisagreement-activity-7065018570874736640-GCiz?utm_source=share&amp;utm_medium=member_desktop" target="_blank" rel="noreferrer noopener">captured the interest of stakeholders</a>&nbsp;due to its unbalanced perspective on carbon removal. In response to numerous requests for calls, meetings, and submission input, this blog post aims to shed light on the process, the pertinent considerations, and advice on how to engage with impact.</p>
<p>A short disclaimer before getting started. Emission reductions should be prioritised over removals, all types of removals are needed to achieve the Paris Agreement temperature goal, carbon markets are one of many tools in climate policy to incentivise climate action, and Article 6.4 mechanism under the Paris Agreement covers both emission reductions and removals. This blog post focuses narrowly on removals in the context of the Article 6.4 mechanism.</p>
<p>If you&rsquo;re new to the topic, check out these three posts for background: (1)&nbsp;<a href="https://evetamme.com/2022/10/02/un-standard-setters-carbon-removal/" target="_blank" rel="noreferrer noopener">the Article 6.4 mechanism under the Paris Agreement carbon markets and why it matters for removals</a>, (2)&nbsp;<a href="https://evetamme.com/2022/11/24/cop27-paving-the-way-for-the-removals-cop/" target="_blank" rel="noreferrer noopener">the summary of carbon removal developments at COP27 and outlook for COP 28</a>, and (3)&nbsp;<a href="https://evetamme.com/2023/03/12/eu-and-un-work-on-carbon-removal-in-2023/" target="_blank" rel="noreferrer noopener">an overview of the March 2023 Article 6.4 Supervisory Body meeting from removals perspective</a>.</p>
<div class="wp-block-spacer" aria-hidden="true"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/013a74a4638db0bdf6cffc6b3ea8c25bad5100ff.jpg?" alt="Paris Agreement Supervisory Body" /></div>
<h2 class="wp-block-spacer" aria-hidden="true"><strong>From past to present &mdash; progress and plan for 2023</strong></h2>
<p>The&nbsp;<a href="https://unfccc.int/documents/624417" target="_blank" rel="noreferrer noopener">COP27 decision</a>&nbsp;mandated the Supervisory Body to &ldquo;<em>elaborate and further develop</em>&rdquo; their work on removals over 2023, building on stakeholder input. Over the&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb003-a06.pdf" target="_blank" rel="noreferrer noopener">coming meetings</a>&nbsp;this year, the Supervisory Body will prepare a dual set of recommendations on removals and methodologies that will be up for consideration at COP28 in Dubai.</p>
<p>These recommendations on removals and methodologies will set up the general framework which will guide the upcoming work, incl on the methodologies for removals. It&rsquo;s somewhat comparable to setting the general framework for removals in Europe with the&nbsp;<a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/" target="_blank" rel="noreferrer noopener">Carbon Removal Certification Framework</a>&nbsp;(CRCF) whilst the methodologies will follow later on. The timetable of Article 6.4 mechanism (recommendations to be adopted in Nov 2023) and the EU CRCF process (to be agreed upon in Q1 2024) are quite similar. It remains to be seen which process will become operational earlier.</p>
<p>So far, stakeholders have submitted their views on removals under Article 6.4 in&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-annotated-documents" target="_blank" rel="noreferrer noopener">September 2022</a>&nbsp;(2 submissions),&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-removals-activities" target="_blank" rel="noreferrer noopener">October 2022</a>&nbsp;(52 submissions),&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb003-annotated-documents" target="_blank" rel="noreferrer noopener">November 2022</a>&nbsp;(3 submissions), and&nbsp;<a href="https://www4.unfccc.int/sites/submissionsstaging/Pages/Home.aspx" target="_blank" rel="noreferrer noopener">March 2023</a>&nbsp;(32 submissions).</p>
<p>At the time of writing, there is an&nbsp;<strong><a href="https://unfccc.int/call-for-input-2023-issues-included-in-the-annotated-agenda-and-related-annexes-of-the-fifth-meeting" target="_blank" rel="noreferrer noopener">open call for input until 25 May 2023</a></strong>&nbsp;for the upcoming&nbsp;<a href="https://unfccc.int/event/Supervisory-Body-5" target="_blank" rel="noreferrer noopener">5th Supervisory Body meeting</a>. Removals are one of several items on the agenda, and many stakeholders have noticed the surprising take in the&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb005-aa-a09.pdf" target="_blank" rel="noreferrer noopener">information note</a>&nbsp;prepared by the UNFCCC Secretariat.</p>
<h2 class="wp-block-spacer" aria-hidden="true"><strong>An unexpected take on carbon removal</strong></h2>
<p>The&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb005-aa-a09.pdf" target="_blank" rel="noreferrer noopener">information note&nbsp;</a>has been built up over several iterations since the fall of 2022 (<a href="https://unfccc.int/sites/default/files/resource/a64-sb002-aa-a06.pdf" target="_blank" rel="noopener">V1</a>,&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb003-aa-a04.pdf" target="_blank" rel="noopener">V2</a>,&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb004-aa-a04.pdf" target="_blank" rel="noopener">V3</a>&nbsp;and now&nbsp;<a href="https://unfccc.int/sites/default/files/resource/a64-sb005-aa-a09.pdf" target="_blank" rel="noreferrer noopener">V4</a>). It is prepared by the&nbsp;<a href="https://unfccc.int/about-us/about-the-secretariat" target="_blank" rel="noreferrer noopener">UNFCCC Secretariat</a>&nbsp;and &ldquo;<em>has been revised to include the guidance of the Supervisory Body as well as the views of Parties and observers</em>&ldquo;. Its purpose is to &ldquo;<em>support the work of the Supervisory Body in developing recommendations on activities involving removals</em>&ldquo;.</p>
<p>The note serves as a background document, compiling the details needed to develop the main document that will be submitted for adoption at COP28 &mdash; &ldquo;Recommendation. Activities involving removals under the Article 6.4 mechanism&rdquo;.</p>
<p>This is to explain that it is not an operative document being prepared for adoption.</p>
<p>However, its content still matters.</p>
<p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/ca0f121646cb39335de66af146d27118c6b0ce85.png?" alt="" /></p>
<p>The reactions and comments to my&nbsp;<a href="https://www.linkedin.com/posts/evetamme_carbonremoval-article6-parisagreement-activity-7065018570874736640-GCiz" target="_blank" rel="noreferrer noopener">LinkedIn</a>&nbsp;and&nbsp;<a href="https://twitter.com/EveTamme/status/1659251623195967523" target="_blank" rel="noreferrer noopener">Twitter</a>&nbsp;posts drawing attention to the topic have led to intense discussions and sparked interest in&nbsp;<a href="https://carbon-pulse.com/204063/" target="_blank" rel="noreferrer noopener">the media</a>.</p>
<p>The note should offer a balanced overview of a range of carbon removal activities, based on the latest science (the IPCC Sixth Assessment Report is conveniently ready), and input from the Supervisory Body, countries and stakeholders.</p>
<p>Instead, we see something quite different.</p>
<p>The note deems all engineered removals technologically and economically unproven, not contributing to sustainable development, and claims that engineered removals do not serve any of the objectives of the Article 6.4 mechanism.</p>
<p>It&rsquo;s not only the take on engineered removals that is problematic. By comparison, the list of land-based activities is surprisingly short on cons, leaving out competition for land, food and water and much more that regularly feature in the IPCC reports.</p>
<p>Looking at the two side by side, or in this case, above and below, shows an approach that seems to strongly disadvantage engineered removals, to the extent of excluding these from the scope of Article 6.4 mechanism, and making the list more advantageous for land-based removals.</p>
<div class="wp-block-spacer" aria-hidden="true"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/469aa8a997a7efe279dab354f180df8e219ceadd.png?" alt="Linkedin comments" /></div>
<p>Having the UNFCCC Secretariat prepare a document that is so obviously imbalanced raises eyebrows and questions.</p>
<p>Let&rsquo;s take stock of what has gone wrong.</p>
<h3 class="wp-block-heading">1. The science</h3>
<p>The note ignores the science. And the science is clear: next to steep emission reductions,&nbsp;<a href="https://evetamme.com/2022/04/06/ar6-wgiii-report-carbon-removal/" target="_blank" rel="noreferrer noopener">removals are needed to (1) further reduce net emission levels, (2) balance residual emissions to help reach net-zero emissions, and (3) achieve and sustain net negative emissions</a>. All types of removals (land-based and engineered) will be needed to make this a reality because all have limitations.</p>
<h3 class="wp-block-heading">2. Pros and cons</h3>
<p>The note pics and chooses pros and cons instead of offering a scientifically informed and balanced overview. A good example of a balanced comparison with pros and cons is in the&nbsp;<a href="https://www.ipcc.ch/report/ar6/wg3/downloads/report/IPCC_AR6_WGIII_FullReport.pdf" target="_blank" rel="noreferrer noopener">IPCC AR6 WG3 full report&nbsp;</a>table 12.6 &ldquo;Summary of status, costs, potentials, risk and impacts, co-benefits, trade-offs and spillover effects and the role in mitigation pathways for CDR methods&rdquo;, or even more detailed take in the&nbsp;<a href="https://www.stateofcdr.org/" target="_blank" rel="noreferrer noopener">State of CDR report</a>&nbsp;comparison table on pages 18-19.</p>
<h3 class="wp-block-heading">3. Stakeholder input</h3>
<p>There is a long list of stakeholder input that highlights the role of engineered removals (from&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-annotated-documents" target="_blank" rel="noreferrer noopener">Sept 2022</a>,&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-removals-activities" target="_blank" rel="noreferrer noopener">Oct 2022</a>,&nbsp;<a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb003-annotated-documents" target="_blank" rel="noreferrer noopener">Nov 2022</a>, and&nbsp;<a href="https://www4.unfccc.int/sites/submissionsstaging/Pages/Home.aspx" target="_blank" rel="noreferrer noopener">March 2023</a>). Most of this has been ignored in the note by judging all engineered removals to be technologically and economically unproven, and ultimately by suggesting to leave engineered removals out of the scope of Article 6.4.</p>
<h3 class="wp-block-heading">4. Countries&rsquo; climate targets</h3>
<p>An increasing number of countries rely on engineered removals to achieve their climate targets, with BECCS being the most common but other methods are slowly gaining attention. Leaving such removals left out of the Article 6.4 mechanism scope makes it more difficult to achieve the increasingly ambitious NDCs over the coming decades. Article 6.4 is not a tool for the next five years or the next ten years &mdash; it&rsquo;s part of the toolbox to achieve net zero emissions globally. Removals will become increasingly important in countries&rsquo; climate change mitigation activities.</p>
<h3 class="wp-block-heading">5. The objective of Article 6.4 of the Paris Agreement</h3>
<p>The information note claims that engineered removals don&rsquo;t serve any of the objectives of the Article 6.4 mechanism. The list below, considered in combination with the points above, proves such a claim to be baseless (<a href="https://onlinelibrary.wiley.com/doi/full/10.1111/reel.12401" target="_blank" rel="noreferrer noopener">FYI removals are part of climate change mitigation</a>).</p>
<p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/17c64e33f2dfcefa3f25388a53ab35bd590110f4.png?" alt="" /></p>
<h3 class="wp-block-heading">6. Global methodologies for removals</h3>
<p>Article 6.4 is widely expected to deliver a global standard for methodologies for carbon removal activities, especially for novel removal activities where a lot is still being developed. Other carbon markets are currently keeping an eye on these developments. Leaving engineered removals out of the scope of Article 6.4 would be a missed opportunity to establish robust methodologies on a global level.</p>
<h2 class="wp-block-heading">What can the stakeholders do?</h2>
<p>There are established communication channels in how Article 6.4 Supervisory Body works. When it comes to the UNFCCC, &ldquo;<a href="https://www.ft.com/content/5d307386-8896-4fcc-a9fe-b10678775e10" target="_blank" rel="noreferrer noopener">in this process, process is substance</a>&ldquo;.</p>
<p>Documents are published before each meeting, and stakeholders have a week to react. A massive reaction now will indicate that something is wrong. A lack of reaction will indicate everything is fine. Sharing concerns on social media or media outlets, whilst helping with capacity building and sharing information, is not part of the formal communication and can&rsquo;t be taken into account in the official processes of the Supervisory Body.</p>
<p>So, the stakeholders need to&nbsp;<a href="https://unfccc.int/call-for-input-2023-issues-included-in-the-annotated-agenda-and-related-annexes-of-the-fifth-meeting" target="_blank" rel="noreferrer noopener">use this call for inputs, due 25 May,</a>&nbsp;to formally communicate if their previous submissions have not been taken into account or have been reflected with bias in the meeting documents. Other relevant aspects and pointers (I listed my personal take in the previous section) will no doubt be useful to make the case.</p>
<div class="wp-block-spacer" aria-hidden="true"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/f217310fe157feb531579d0fb603d430cb89d46c.jpg?" alt="" /></div>
<div class="wp-block-spacer" aria-hidden="true">&nbsp;</div>
<div class="wp-block-spacer" aria-hidden="true">Engaging with the&nbsp;<a href="https://unfccc.int/process-and-meetings/bodies/constituted-bodies/article-64-supervisory-body" target="_blank" rel="noreferrer noopener">Supervisory Body members</a>&nbsp;is always an option but won&rsquo;t replace engagement through the official call for input. Bear in mind that the information note on removals has been drafted by the&nbsp;<a href="https://unfccc.int/about-us/about-the-secretariat" target="_blank" rel="noreferrer noopener">UNFCCC Secretariat</a>, not the Supervisory Body members.</div>
<p>To keep up with the process, stakeholders can attend the meetings as observers which also offers an opportunity to engage at the meeting (the registration deadline is three weeks before the meeting), follow the live stream of the meeting, or watch the recording afterwards.</p>
<p>After the 5th Supervisory Body meeting, the next major milestone for removals is the launch of the structured public consultation on removal activities, due to be launched in June 2023.</p>
<div class="wp-block-spacer" aria-hidden="true"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/80f69984cd9a733a28502d18ef2c31bf8eccb3ae.png?" alt="" /></div>
<h2 class="wp-block-heading">Conclusion</h2>
<p>Article 6 of the Paris Agreement has immense potential to increase climate ambition. A new report shows it can&nbsp;<a href="https://www.ieta.org/Article-6-Modelling/" target="_blank" rel="noreferrer noopener">double emissions savings under the Paris Agreement.</a>&nbsp;The centralised Article 6.4 mechanism can play an important role in making that a reality.</p>
<p>It&rsquo;s important to get the governance of removals right under Article 6. There is a growing ecosystem of novel removal methods and many of these are poised to be used by countries in their climate targets. Removal stakeholders have been actively contributing to the Article 6.4 process to date, and that has to continue if the mechanism was to succeed.</p>
<p>The imbalanced information note published before the 5th Supervisory Body meeting requires attention and revision. It&rsquo;s time to read up, get engaged, establish expertise and/or collaborate with those who have it, and help shape the global rules for carbon removal.&nbsp;<a href="https://unfccc.int/call-for-input-2023-issues-included-in-the-annotated-agenda-and-related-annexes-of-the-fifth-meeting" target="_blank" rel="noreferrer noopener">Submit your input by 25 May 2023.</a></p>
<p><em>This article is also published on the <a href="https://evetamme.com/2023/05/21/challenges-for-carbon-removal-under-the-un-standard/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>

Challenges for carbon removal under the UN standard

March 2023 laid the groundwork for developing carbon removal methodologies under the EU Carbon Removal Certification and the Paris Agreement. The European Commission’s Carbon Removals Expert Group had its inaugural meeting, and the Article 6.4 Supervisory Body convened for its first session of the year.

Whilst both groups were largely in the planning mode with their carbon removal-related activities, there are a few noteworthy developments to highlight. 

<p>March 2023 laid the groundwork for developing carbon removal methodologies under the EU Carbon Removal Certification and the Paris Agreement. The European Commission’s Carbon Removals Expert Group had its inaugural meeting, and the Article 6.4 Supervisory Body convened for its first session of the year.</p>
<p>Whilst both groups were largely in the planning mode with their carbon removal-related activities, there are a few noteworthy developments to highlight. This post shares key takeaways and reflections, starting with the EU expert group and finishing with Article 6.4 Supervisory Body.</p>
<h1>EU Carbon Removals Expert Group gets started</h1>
<p>The inaugural meeting of the <a href="https://climate.ec.europa.eu/eu-action/sustainable-carbon-cycles/expert-group-carbon-removals_en">European Commission’s Carbon Removals Expert Group</a> took place on 7 March, and I attended in my personal capacity in observer status. It was a full house, + numerous attendees online and a very busy agenda. So busy that there was little time for discussion.</p>
<p>The Expert Group started in a closed session by agreeing on the rules of procedure. The group’s decisions are intended to be consensus-based, with simple majority voting as a backup plan. Given the divergent views that already emerged at the first meeting, it is bound to be a challenge. But the group should indeed strive for consensus.</p>
<p>The next step was planning the work for 2023, which will all be about exploration, scoping, and looking at best practices and challenges. There’s a clear distinction between the ongoing co-decision process on <a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/">Carbon Removal Certification Framework</a> and the expert group’s work on methodologies. One is about the framework, and the other on methodologies. Nothing in the group’s work can prejudge what the framework will look like.</p>
<img src="https://illuminem.b-cdn.net/articlebody/654d19e7ac24c1ad72b152ad80de933a260a2163.jpg" alt="The first meeting of the European Commission’s Carbon Removals Expert Group. Photo by Eve Tamme">
<p>The open session consisted of numerous presentations and Q&amp;A sessions. Surprisingly, in a couple of sessions, the focus seemed to slip from removals to solutions that are not removals but reduce emissions or displace fossil fuel. This hints that some work is ahead to bring the group on the same page regarding the basics.</p>
<p>What merits attention is the <a href="https://ec.europa.eu/transparency/expert-groups-register/screen/expert-groups/consult?lang=en&amp;groupID=3861">composition of the group</a>. There are three types of removal activities under the <a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/">Carbon Removal Certification Framework (CRCF) proposal</a> — permanent carbon storage, carbon farming, and carbon storage in products. If one looks at the list of members, it becomes clear that the interests of the organisations involved are not equally distributed over the three types of removal activities. Hence, if there is a need to vote (a simple majority vote), this can impact the outcome.</p>
<p>The CRCF proposal is still going through the co-decision process, and the mandate of the expert group is part of that proposal. Several questions were raised during the first meeting regarding the role of the group, and not all of these received clear answers. The CRCF needs to establish a clear (ideally forward-looking) mandate, so everyone knows what’s in and outside the scope of the Expert Group work. Given the group’s composition and upcoming developments (e. g inclusion of removals in the EU ETS), what would be the best use of this group? Should the mandate be kept as narrowly as possible on helping Commission to develop the methodologies for CRCF? Or expanding it wider, given other removals-related considerations? There are bound to be diverging views on this front.</p>
<h2>Next steps</h2>
<p>A new expert group website will be launched where all the input from stakeholders will be compiled. This content, together with the upcoming meetings on carbon farming, industrial removals and certification processes over 2023 (see below) will feed into a report on best practices. The final timing of the latter depends on the speed of the CRCF co-decision process.</p>
<img src="https://illuminem.b-cdn.net/articlebody/333e7af6ad90c2e930e6358091349e2f7d9fddd5.jpg" alt="Source: European Commission, 2023​">
<p>Subgroups of the Expert Group will be formed in 2024, and the real work on methodologies will get started once the Carbon Removal Certification Framework has been agreed upon.</p>
<p>So, what did we achieve?</p>
<p>All in all — we got started. This was the first ever such meeting dedicated exclusively to removals. The main deliverable of the event was agreeing on the rules of procedure and plans for the rest of the year. And for those attending in person, excellent networking opportunities.</p>
<h1>Article 6.4 Supervisory Body shapes their work on removals for 2023</h1>
<p>Article 6.4 Supervisory Body (SB) met for their first session this year during 7-10 March 2023 in Bonn (<a href="https://unfccc.int/event/Supervisory-Body-4">recording and documents</a>).</p>
<p>Let’s start with a short recap of what happened before.</p>
<p>The SB spent over 13 hours discussing removals during its previous session before COP27 last year and condensed the recommendations on removals into a 3-page document that was submitted to <a href="https://unfccc.int/process/bodies/supreme-bodies/conference-of-the-parties-serving-as-the-meeting-of-the-parties-to-the-paris-agreement-cma">CMA</a> for adoption. One SB member described this at the March meeting as a “failure has its benefits”, given the attention and input it eventually delivered.</p>
<p>Ultimately, CMA did not adopt these recommendations. Instead, it provided guidance that gave Article 6.4 SB the mandate to “elaborate and further develop” their work on removal over 2023, building on stakeholder input due in March 2023. <a href="https://evetamme.com/2022/11/24/cop27-paving-the-way-for-the-removals-cop/">Read more about the COP27 outcome on removals</a> and why <a href="https://evetamme.com/2022/10/02/un-standard-setters-carbon-removal/">Article 6.4 work on removals matters</a>.</p>
<p>The 7-10 March session took place a week before the <a href="https://twitter.com/EveTamme/status/1625765358463340548?s=20">deadline for stakeholder input</a>. This is why this meeting focused on <a href="https://unfccc.int/sites/default/files/resource/a64-sb004-aa.pdf">other important topics</a> and dedicated less than two hours to discussing removals. Given that the SB mandate required building the work on removals on top of stakeholder input, the group was in waiting and planning mode and didn’t discuss the content.</p>
<p>The most important element of progress in the March meeting regarding removals was establishing a better structure and focus for discussing and possible future stakeholder input by adopting <a href="https://unfccc.int/sites/default/files/resource/a64-sb004-a02.pdf">guidance and questions for further work on removals</a>.</p>
<p>It’s crucial to note that the SB work on methodologies is equally important to follow as its guidance on removal activities. That is where the methodologies for emission reduction and removal activities will be developed (see also <a href="https://unfccc.int/sites/default/files/resource/a64-sb004-a03.pdf">guidance and questions for further work on methodologies</a>).</p>
<h2>Outcome and next steps</h2>
<p>The SB will use already received and incoming stakeholder input (the deadline is 15 March) to identify information gaps. These gaps will feed into a structured public consultation with specific questions to receive targeted input. Meanwhile, the informal removals working group within the SB (previous composition listed <a href="https://unfccc.int/sites/default/files/resource/a64-sb002.pdf">here</a>) will continue its work and contemplate preparing questions for public consultation to be considered at the next SB meeting in May.</p>
<p>The secretariat will summarise stakeholder input and prepare an updated version of the <a href="https://unfccc.int/sites/default/files/resource/a64-sb004-aa-a04.pdf">information note on removal activities</a>. Interestingly, the version of the information note in the March meeting still included elements (e. g tonne-year crediting) that the SB members had repeatedly asked to leave out. Let’s see if the new version will follow the SB guidance more closely.</p>
<p>The SB has four more meetings scheduled <a href="https://unfccc.int/sites/default/files/resource/a64-sb004-a07.pdf">on its calendar for 2023</a>. This is not much, given the wide range of areas where SB must deliver by COP28. If a lot of the core work is left for the year’s second half, it will be challenging to deliver on all fronts.</p>
<p>All the decisions on removals taken at the March SB meeting are outlined in point 13 of the <a href="https://unfccc.int/sites/default/files/resource/a64-sb004.pdf">meeting report</a>.</p>
<h1>Conclusion</h1>
<p>Preparations for the work on carbon removal methodologies at the EU and UN levels are progressing simultaneously. Stakeholders have been asking for an exchange of information in both directions to ensure that both systems will rely on robust methodologies informed by the latest developments in this field. 2023 is poised to lay the groundwork in both settings. Let’s ensure it’s a solid foundation for developing carbon removal methodologies.</p>
<p><em>This article is also published on the</em> <em><a href="https://evetamme.com/2023/03/12/eu-and-un-work-on-carbon-removal-in-2023/">author&#x27;s blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>
<h6>Cover photo by <a href="https://unsplash.com/@claudiotesta?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Claudio Testa</a> on <a href="https://unsplash.com/photos/-SO3JtE3gZo?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>​ </h6>


EU and UN Kickstart Their Work on Carbon Removal for 2023

2023 is bound to have an outsized impact on the EU’s climate policy. The preparation done this year will lay the foundation for the new EU climate target, to be proposed in the spring of 2024. It will shape the policy landscape for the next 15 years. However, so far it’s flying largely under the radar and is not getting the attention it deserves.

<p>2023 is bound to have an outsized impact on the EU’s climate policy. The preparation done this year will lay the foundation for the new EU climate target, to be proposed in the spring of 2024. It will shape the policy landscape for the next 15 years. However, so far it’s flying largely under the radar and is not getting the attention it deserves.</p>
<p>2022 was the core year of delivery in EU policymaking. It had a supercharged agenda under the <a href="https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-a-green-transition/">FitFor55 package</a> — so much so that it was a real challenge to keep up with all the developments. </p>
<p>The current year should have a slightly slower pace. Notable developments will include the finalisation of several energy files under the FitFor55 package, the negotiations on the Carbon Removal Certification Framework, and the draft National Climate and Energy Plans. The newly found bandwidth is, however, already being consumed by new developments, including the EU’s response to the Inflation Reduction Act.</p>
<p>Next up — 2024. For many, it is seen as a quiet year in EU policy-making. The year of European elections. The year of campaigning and changing guard in the European Commission and European Parliament.</p>
<p>But it will also be the year of proposing the EU’s 2040 climate target and climate budget[1] for 2030-2050. The proposal’s timing is linked to the <a href="https://unfccc.int/topics/global-stocktake">global stocktake</a> under the Paris Agreement. The first global stocktake takes place in 2023, defining the upcoming COP28 as a <a href="https://evetamme.com/2022/11/24/cop27-paving-the-way-for-the-removals-cop/">“Global Stocktake COP” or an “ambition COP”</a>.</p>
<p>According to the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32021R1119">European Climate Law</a>, the proposal for the EU’s 2040 target will be published “<em>at the latest within six months of the first global stocktake”.</em> This means spring 2024. <strong>The key proposal which will shape the EU’s climate policy in the medium term will be one of the last crucial deliverables of the current Commission.</strong></p>
<h1>EU’s 2040 Climate Target</h1>
<p>The EU has already agreed on climate targets for 2030 and 2050 in its Climate Law. Emissions will be cut by 55% compared to 1990 by 2030, with recently <a href="https://www.euractiv.com/section/energy-environment/news/timmermans-eus-2030-climate-goal-can-now-be-increased-to-57/">agreed policies helping to reduce emissions even more</a>. The 2050 target is EU-wide climate neutrality.</p>
<p>What is currently missing is the defined path from 2030 to 2050, and that is what the 2040 target and its accompanying 2030-2050 climate budget will provide. The answer to the question “how are we going to get there?” whilst providing essential policy predictability to all the stakeholders.</p>
<img src="https://illuminem.b-cdn.net/articlebody/879c4a883ddebc914dfe16df936ecf2514439eb0.png" alt="undefined">
<p>As already mentioned, the 2040 target will be accompanied by a climate budget for 2030-2050. This is the first for the EU. Some Member States have been asking for a climate budget for well over a decade, and the UK has used carbon budgets for a long time. But for the EU, it will be a completely new regulatory tool. It remains to be seen how it impacts other policies in practice.</p>
<p><a href="https://www.eea.europa.eu/about-us/climate-advisory-board">European Scientific Advisory Board on Climate Change</a> (Advisory Board) is one of the first organisations to provide substantial input for preparing the EU’s 2040 target and climate budget. The Advisory Board, established by the European Climate Law, provides independent scientific advice and produces reports on EU measures, climate targets and indicative greenhouse gas budgets and their coherence with the European Climate Law and the EU’s international commitments under the Paris Agreement.</p>
<p>In January 2023, the Advisory Board submitted its <a href="https://www.eea.europa.eu/about-us/climate-advisory-board/setting-climate-targets-based-on">initial recommendations for the 2040 climate target proposal</a> to the European Commission. The recommendations outline the tremendous complexity of the task, set high quality and transparency standards and highlight the unavoidable value judgements in target setting. The visual below shows the five key areas for European Commission to consider in their upcoming analysis.</p>
<img src="https://illuminem.b-cdn.net/articlebody/733ba157f7dd60a100f418d9b982e3c110d9b220.png" alt="Source: Setting climate targets based on scientific evidence and EU values: initial recommendations to the European Commission.​ ">
<p>The document is a great resource to help understand the considerations around the EU’s “fair share”, quantifying pathways, assessing the implications of different pathways and using value judgements. And it also offers a structured path for the Commission with its templates of steps, assessments and frameworks.</p>
<h1>The 2040 target will be shaped in 2023</h1>
<p>This is the first round of advice from the Advisory Body. They have sent it in to provide timely input to the process. Indeed, whilst the European Commission proposal will come out in the spring of 2024, the preparations have already started and will largely take place in 2023.</p>
<p>Waiting for the proposal to be published before engaging means lagging behind the process and having much fewer options to influence the outcome. For example, the contents of the Commission’s impact assessment will be instrumental in defining the possibilities and options around the design of the target. It’s nearly impossible to get the legislators to agree to solutions that have not been covered in the impact assessment.</p>
<p>The 2040 target is so broad that one can bring up endless aspects. Let’s take a closer look at carbon removal as an example. The design of the 2040 target defines how well it incentivises emission reductions and carbon removal over the next 15 years or so. The considerations around the coverage of novel removals, separation of emission reduction and removal targets, and the specificity of the removal target(s) all have different impacts. And 2023 is the year when the stakeholders can provide their guidance.</p>
<p>Looking back at previous scenarios takes us to 2018, when the Commission published its Clean Planet for All Communication with an <a href="https://climate.ec.europa.eu/system/files/2018-11/com_2018_733_analysis_in_support_en.pdf">in-depth analysis</a>. This informed the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52019DC0640">European Green Deal Communication</a> and its <a href="https://unfccc.int/sites/default/files/resource/HR-03-06-2020%20EU%20Submission%20on%20Long%20term%20strategy.pdf">Long Term Strategy</a>. However, the underlying data of that analysis raised questions already at the time. The way it covered capturing, reusing and storing CO2 and related climate impact was very confusing. The 2040 target has to rely on a better foundation.</p>
<p>The design of the 2040 target and climate budget will have a trickle-down effect on future policy revisions. Taking again carbon removal as an example, it will define how carbon removal will be incorporated into the policy tools like the EU Emissions Trading System, Effort Sharing Regulation and more.</p>
<p>The Advisory Board will publish additional quantitative advice in the first half of 2023, including interim target values. Meanwhile, the engagement of stakeholders should pick up via an upcoming stakeholder consultation. Look out for the announcement!</p>
<h1>Final thoughts</h1>
<p>The shaping of the EU’s 2040 climate target and 2030-2050 climate budget has started but is currently not getting the attention it deserves. The next few months will see a stakeholder consultation, further input from the Advisory Board, and increasing scrutiny of the upcoming proposal. 2023 will define what shape and form the 2040 target can take during the upcoming negotiations once the proposal is out. And the 2040 target will shape the next revisions of the EU’s climate policy. This is the year to engage and impact.</p>
<h3>Notes</h3>
<p>[1] – IPCC’s global carbon budget includes only carbon dioxide, but the EU will prepare a greenhouse gas budget that covers all greenhouse gases. To reflect this, I’m using the term “climate budget” instead of “carbon budget”</p>
<p><em>This article is also published on the <a href="https://evetamme.com/2023/01/31/2023-the-year-of-shaping-eus-2040-climate-target/">author&#x27;s blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>


2023 — the Year of Shaping EU’s 2040 Climate Target

High-durability carbon removal is gathering increasing attention in the national and corporate net-zero plans. Both public and private sectors have recognised the importance of this sector and started mobilising funding to scale it up. The first engineered carbon removal projects that have received substantial public funding have emerged. Some of these projects are looking to stack this support with the proceeds from selling removal credits on the Voluntary Carbon Markets (VCM).

<p>High-durability carbon removal[1] is gathering increasing attention in the national and corporate net-zero plans. Both public and private sectors have recognised the importance of this sector and started mobilising funding to scale it up. The first engineered carbon removal projects that have received substantial public funding have emerged. Some of these projects are looking to stack this support with the proceeds from selling removal credits on the Voluntary Carbon Markets (VCM).</p>
<p>Today, there are diverging views on how to combine these resources. This blog post explores considerations in such situations, together with elaborating on the changing role of the VCM and possible ways forward.</p>
<h1>1. Considering Voluntary Carbon Markets next to public funding</h1>
<p>Several types of engineered carbon removal projects[2] have long lead times, are capital intensive, and require public support to be developed. To scale up these industries, governments (and supranational entities like the EU) offer different types of financial aid. The high capital costs often require project developers to consider stacking various funding sources. Such projects are outside the current scope of compliance carbon markets, which today consist of emissions trading systems (but will include Article 6 markets under the Paris Agreement in the future).</p>
<p>VCM has played a crucial role in financing novel carbon removal methods. The <a href="https://www.ecosystemmarketplace.com/articles/the-art-of-integrity-state-of-the-voluntary-carbon-markets-q3-2022/">rapid increase in the VCM size</a> indicates that combining project financing from public sources and VCM can stimulate the scale-up of engineered carbon removal. The strong demand from corporate buyers for high-durability carbon removal credits to meet their climate targets is a case in point.</p>
<p>There are three aspects to consider when combining public support and VCM for such projects:</p>
<ol><li>Additionality criteria in standards;</li></ol>
<ol><li>Government requirements;</li></ol>
<ol><li>The intersection of Article 6 of the Paris Agreement and the VCM.</li></ol>
<p>The sections below delve into these considerations in sequence, followed by an exploration of the role of the VCM and the synergies between public finance and VCM.</p>
<h2>1.1. Additionality criteria in standards</h2>
<p>The first step would be to check what the standards say. Can credits be issued for such a project in the given circumstances, which include a certain amount of public funding? What do the additionality criteria specify? The financial additionality tends to require carbon credit revenue to be crucial in making the project happen, even if that revenue comes on top of other types of support. If that is the case, credits could be issued for removals from such projects. Should the project be viable without the revenue stream from carbon credit sales, it won’t meet the standard’s requirements and generate any carbon credits.</p>
<p>Carbon markets would benefit from a harmonised approach by governments, perhaps based on the requirements of carbon crediting standards. However, given the uncertainties in the intersection of Article 6 of the Paris Agreement and the VCM, <a href="https://www.goldstandard.org/sites/default/files/documents/carbon_credit_rights_under_the_paris_agreement_november_2022.pdf">each government is likely to take a slightly different approach to carbon markets in the future</a>. Such a patchwork of approaches is a direct result of the bottom-up nature of the Paris Agreement, and VCM stakeholders will need to manage their risks accordingly.</p>
<h2>1.2. Government requirements</h2>
<p>Whether public finance is involved or not, governments may choose to regulate which sectors/projects and under what circumstances can participate in the VCM, establish administrative requirements to that end (approval, registries), and add a fee structure to such arrangements.</p>
<p>Tailor-made examples are emerging regarding engineered removal projects that receive public funding. One European country is planning to allow the project developer to sell credits on the VCM on the condition of paying the state back the equivalent amount of money per tonne that the project has received from public funds. There are no written sources to refer to at this point.</p>
<p>Another very different example is the US, where the federal 45Q tax credit comes with no strings attached when it comes to VCM. The project’s viability is determined based on a carbon crediting standard and the additionality requirements therein (see point 1 above).</p>
<p>New approaches by governments to regulating the link between public funding and VCM crediting are bound to emerge as this field matures.</p>
<h2>1.3. The intersection of Article 6 of the Paris Agreement and the VCM</h2>
<p>Corporate and national carbon accounting systems are not compatible. There is no clear way to nest companies’ emissions and removals within those of a country, especially in the case of multinational corporations. This limitation is one of the main reasons for the uncertainties that have emerged in the intersection of compliance and VCM. If companies’ emissions and removals could be transparently nested within national accounting, VCM would already have a much more explicit role in achieving the Paris Agreement goals.</p>
<p>Today, the open questions are around the requirement for countries to adjust their carbon accounting (called “corresponding adjustment”) when authorising carbon credits for use in the VCM to avoid double claiming[3]. There are stakeholders calling for “corresponding adjustments for everything”, as outlined in the <a href="https://cambioclimatico.go.cr/following-cop26-climate-talks-the-san-jose-principles-coalition-recommits-to-principles-for-high-integrity-carbon-markets-pledges-to-act-on-them-together/">San José Principles</a>.</p>
<p>Another viewpoint sees the mandatory nature of such adjustments as an unnecessary concept (given that corporate and national carbon accounting are separate) that is detrimental to the growth of VCM and finds that the technical details in applying the corresponding adjustments distract from the real action on the ground.</p>
<p>Yet a third group sees a role for corresponding adjustments in the mid-to-long term, but not in the current time of transition where the technical nuances and infrastructure are still being established. And there are many views in between.</p>
<p>The fact remains that the host governments have the right to choose whether to authorise the use of carbon credits for VCM (that would lead to corresponding adjustment) or to retain the right to use these emission reductions or removals towards their own Nationally Determined Contributions (NDC)[4].</p>
<p>Market actors have <a href="https://www.goldstandard.org/sites/default/files/documents/carbon_credit_rights_under_the_paris_agreement_november_2022.pdf">differing views</a> on how carbon credits should be treated in the VCM when they are not authorised for use under Article 6 and whether non-authorised credits can be used towards offsetting claims. A common recommendation from governments is to <a href="https://mmm.fi/-/1410903/selvitys-vapaaehtoisten-paastokompensaatioiden-kaksoislaskentaa-voidaan-valttaa-eri-tavoin-?languageId=en_US">use carbon credits for contributing to national NDC instead of a corporate claim for compensation or neutralisation</a>. Furthermore, the <a href="https://unfccc.int/documents/624417">Article 6.4 decision at COP27</a> established a new type of Article 6.4 Emission Reduction – <a href="https://twitter.com/EveTamme/status/1593903125953495040?">“mitigation contribution Art 6.4ERs”</a> together with some examples of use cases (ERs cover both emission reductions and removals). Most recently, the European Commission has proposed a <a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/">Carbon Removal Certification Framework</a> that can be used by the VCM to contribute to the achievement of the EU’s NDC. The private sector has not been keen on contribution credits so far for various reasons, the most prominent being that such claims might not count towards their corporate climate targets – the sole reason for the exponential growth in the VCM.</p>
<p>This comes down to how science-based targets are designed. It’s worth noting that regarding removals, the <a href="https://sciencebasedtargets.org/">Science Based Targets Initiative (SBTI)</a> does not currently require removals to be certified and <a href="https://files.carbonplan.org/SBTi-Carbon-Removal-Letter-11-22-2022.pdf">has yet to define permanent carbon removal</a>. This is, however, not an intentional distinction between how emission reductions/avoidance and removals are considered, but a work in progress where the decision has not yet been taken.</p>
<p>Another option would be to transparently recognise that the same activity can contribute to both the NDC and the corporate climate target[5]. In practice, most corporate emissions and removals are part of national emissions (the same way corporate profits are part of national GDP); we’re just not yet able to robustly nest one into the other. Indicating to which NDC a removal credit contributes safeguards that such credits cannot be used in systems that require corresponding adjustments (e. g. in <a href="https://www.icao.int/environmental-protection/CORSIA/pages/default.aspx">CORSIA</a>).</p>
<p>Governments are bound to be careful when considering requests for authorisation that lead to corresponding adjustments. The first and foremost priority will always be to achieve the countries’ NDC. Suppose authorisation is required for a wide range of purposes, where some activities might not even be within the scope of the national emissions inventory[6]. In that case, governments will have a limited appetite to engage on this front, or they might risk not meeting their climate target. This, in turn, will mean losing the upside of mobilising private funding to support the achievement of the NDCs.</p>
<p>What is needed is clarity from the governments regarding which activities require authorisation and which don’t (and what that means in practice) and, if required, how the authorisation can be obtained and the safeguards that come with it.</p>
<h1>2. The changing role of the VCM</h1>
<p>For corporations and non-state actors, VCM has been the primary tool to achieve corporate climate targets. However, when looking from the perspective of compliance markets and government action, the role of VCM has mainly been seen as twofold: (1) the testing ground for new decarbonisation solutions and methodologies, learnings from which could then be applied when designing compliance markets, and (2) the tool to <a href="https://unfccc.int/news/updated-ndc-synthesis-report-worrying-trends-confirmed">bridge the gap between what the NDCs can deliver</a> and the temperature goal of the Paris Agreement.</p>
<p>This notion has evolved over 2022. The rapidly increasing size and funding capability of the VCM, <a href="https://evetamme.com/2022/05/16/whats-next-for-carbon-markets/">together with the convergence with compliance markets</a>, is changing the scene. Achieving the national net zero targets is the most challenging goal set in climate policy to date. Limiting the potential of the VCM to operate in the margins and only contribute “on top of” the scope of the – ideally economy-wide – NDCs doesn’t seem to be in the best interest of delivering the steep emission reductions and carbon removal required over the coming decades. VCM has the potential to contribute to both the achievement of NDCs and to go beyond them. And in that path, it’s crucial to build in transparency to show precisely where and for what purpose (or claim) VCM credits are used for.</p>
<h1>3. Synergies between public funding and VCM</h1>
<p>VCM can mobilise increasing amounts of funding for climate change mitigation and has been the main driver in financing the early phase of a range of carbon removal methods. Such innovation support is in the interest of both the global achievement of the Paris Agreement temperature goal and the corporates seeking high-durability carbon removal credits.</p>
<p><a href="https://www.ipcc.ch/assessment-report/ar6/">Engineered carbon removal methods must be scaled up to gigatonnes in the coming decades</a>. Government policies, such as the recently updated 45Q tax credit in the US, don’t cover the whole ecosystem of engineered carbon removal methods. Meanwhile, other types of funding, like the EU Innovation Fund, are several times oversubscribed. Leveraging VCM to help scale up carbon removal next to government support would put all resources to work for the climate and deliver the broadest possible climate impact.</p>
<p>Large, engineered carbon removal projects have long lead times and are capital-heavy. An important consideration is how to support project developers’ early action and related risk (business model, legal and technology choices) through public funding during the years when these industries are still being established, and learnings from each project have a substantial contribution to the field.</p>
<h1>Final words</h1>
<p>There is space for public funding to stimulate growth in engineered carbon removal methods and to stack it with VCM financing to create a business case. The ambiguity in terms of claims – in which cases can the removal be claimed by the government, the corporate, or both? – is currently hindering the way forward. There is a need for further clarity in the SBTI guidance on how the claims for durable carbon removal should be made to meet corporate climate targets. In whichever way the solutions are found, especially when VCM contributes to NDCs, transparency will be a crucial element of its implementation.</p>
<p>Public finance alone will not be enough to build the carbon removal capacity the world needs. Clear guidance from governments on how the VCM can contribute would enable to further scale the VCM next to regulatory activity, with the synergies between the two helping to make the most for the climate. Whilst waiting for this clarity, VCM funding will be drawn to those jurisdictions that create positive and more certain enabling environments.</p>
<h4>Footnotes:</h4>
<h5>[1] For the purpose of this post, “high-durability carbon removal” has durability in the magnitude of hundreds of years.</h5>
<h5>[2] For the purposes of this post, “engineered carbon removal” is used to cover Direct Air Capture and Carbon Storage, Biomass Carbon Removal and Storage (including Bioenergy with Carbon Capture and Storage, and Waste-to-Energy with CCS).</h5>
<h5>[3] Double claiming – <a href="https://www.edf.org/sites/default/files/documents/what_makes_a_high_quality_carbon_credit.pdf">a sub-type of double counting where two different entities claim the same emission reduction or removal towards achieving climate change mitigation</a> (but the atmosphere only sees it once). Double claiming occurs when both claims are made for reductions or removals in the same accounting system (e. g. two NDCs) but might not be the case when issued carbon removal credits transparently claim to contribute to the country’s NDC and are used to achieve a corporate climate target. To its country of operation, the corporate will always report its actual emissions, not its progress towards a corporate target. Hence, such a corporate claim does not undermine the environmental integrity of the markets.</h5>
<h5>[4] Countries’ climate pledges under the Paris Agreement.</h5>
<h5>[5] Pathway #3 in Annex 1 of the LEAF Coalition paper, and a similar idea is suggested in the <a href="https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf">UN High-Level Expert Group Net Zero Report</a> “<em>Any credit transactions must be transparently reported, and associated claims must be easily understandable, consistent and verified (where land-based activities are concerned, they should be geo-referenced). Whether or not the credits used can also be counted towards Nationally Determined Contributions under the Paris Agreement must be transparently reported.”</em></h5>
<h5>[6] As one may deduct from <a href="https://cambioclimatico.go.cr/following-cop26-climate-talks-the-san-jose-principles-coalition-recommits-to-principles-for-high-integrity-carbon-markets-pledges-to-act-on-them-together/">San José Principles</a>.</h5>
<p></p>
<p><em>This article is also published on the <a href="https://evetamme.com/2022/12/05/financing-engineered-carbon-removal-combining-public-funding-with-vcm/">author&#x27;s blog</a> and is based on a paper “<a href="https://climateprinciples.com/wp-content/uploads/2022/11/CDR_Public_Funding_VCM_Climate_Principles_2022.pdf">Financing Engineered Carbon Removal with the Voluntary Carbon Markets. Synergies with Public Funding and a Look Beyond Double Claiming</a>“</em> <em>commissioned by Nasdaq, updated with the recent developments, including</em> <a href="https://evetamme.com/2022/11/24/cop27-paving-the-way-for-the-removals-cop/"><em>COP27 outcomes</em></a> <em>and the</em> <em><a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/">EU’s Carbon Removal Certification Framework</a>.</em></p>
<p><em>illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>


Financing Engineered Carbon Removal — Combining Public Funding with Voluntary Carbon Markets

The global race to certify removals is gathering speed. The European Commission has published its proposal for the EU’s Carbon Removal Certification Framework (CRCF), putting Europe in the lead in carbon removal policy design. Next to the EU, several countries, including the UK and US, are considering the best options to quantify removals.

<p>The global race to certify removals is gathering speed. The European Commission has published its <a href="https://climate.ec.europa.eu/document/fad4a049-ff98-476f-b626-b46c6afdded3_en">proposal for the EU’s Carbon Removal Certification Framework (CRCF)</a>, putting Europe in the lead in carbon removal policy design. Next to the EU, several countries, including the UK and US, are considering the best options to quantify removals.</p>
<p>In addition to governments, there is a long list of initiatives and standards in different stages of development, creating carbon removal methodologies for carbon markets. These include the CCS+ Initiative, Verra, C-capsule, Puro.earth, Gold Standard and <a href="https://evetamme.com/2022/10/02/un-standard-setters-carbon-removal/">Article 6.4 mechanism under the Paris Agreement</a>.</p>
<h3>Why this matters</h3>
<p>Carbon removal has a <a href="https://evetamme.com/2022/04/06/ar6-wgiii-report-carbon-removal/">distinct role</a> in the global climate mitigation policy, but there is a lack of robust monitoring, reporting and verification rules for many removal activities. Given that CRCF would apply across Europe, this can enhance the harmonisation in a field that is still becoming increasingly fragmented.</p>
<p>The EU needs a trustworthy system to quantify removals so that it can achieve climate neutrality by 2050 and net negative emissions thereafter. It’s only possible to scale up what can be quantified, and the scale-up of removals needs to be done especially carefully — as a complementary climate mitigation tool next to strongly prioritised steep cuts in emissions.</p>
<p>By building on the CRCF proposal, the EU can establish a world-leading carbon removal certification framework that could be used as a blueprint globally.</p>
<h3>Main principles</h3>
<p>The proposal sets out a general legislative framework that establishes (1) the quality criteria for carbon removals in the EU, (2) the rules for the certification of carbon removals, and (3) the rules for the functioning and recognition of the certification schemes by the European Commission. All in all, the goal is to facilitate the deployment of carbon removals in the EU.</p>
<p>The scope is limited to carbon removal activities within the EU, and the use of the framework is voluntary. The document outlines three types of carbon removal activities: permanent carbon storage, carbon farming, and carbon storage in products.</p>
<img src="https://illuminem.b-cdn.net/articlebody/d34ead57615e280f08c32b22921affce9ed1a292.png" alt="Source: Proposal for a Regulation on an EU certification for carbon removals, European Commission, 2022​ ">
<p>The guiding principles of the framework are “<em>quantification of carbon removal benefits, additionality, long-term storage and environmental sustainability</em>”. It requires the certification schemes to be operated via reliable and transparent procedures, compliance with the certification requirements to be verified by third-party auditors, and all information on the certified carbon removals to be publicly available and traceable through public registries.</p>
<img src="https://illuminem.b-cdn.net/articlebody/617347374b0777a64b73e23d601d3be4353f3d8d.png" alt="Source: Factsheet of the CRCF proposal, European Commission, 2022">
<img src="https://illuminem.b-cdn.net/articlebody/2f64c9c4b605ab285c44a34ec61987e7dc3424f1.png" alt="Source: Factsheet of the CRCF proposal, European Commission, 2022">
<p>Establishing the framework is the first step and doesn’t answer all questions on implementation. Those will be tackled when detailed certification methodologies are developed. During this process, “<em>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 activities</em>”. The European Commission will develop methodologies in close consultation with a soon-to-be-established expert group.</p>
<img src="https://illuminem.b-cdn.net/articlebody/3e09c8c9b75a5c38728762fa4860acd79d8ebd59.png" alt="Source: Factsheet of the CRCF proposal, European Commission, 2022​">
<p>The certification framework is expected to be <a href="https://youtu.be/MpWE8Qjtmj0?t=3829">“dynamic by design”</a> with built-in governance to evolve based on the progress in removal methods.</p>
<h3>What’s missing?</h3>
<p>The main question is the demand for certification. What is the incentive to certify? What can the certificates be used for? It has been proposed as a voluntary framework – the potential use in public funding like Common Agriculture Policy seems to nudge things towards something of a requirement.</p>
<img src="https://illuminem.b-cdn.net/articlebody/da7783a7fea449c7c400882f1dd57ddb0a09f11b.png" alt="Source: Factsheet of the CRCF proposal, European Commission, 2022​">
<p>The CRCF includes a long list of demands on standards, and the transaction costs don’t seem to be negligible. The wider governance framework around the CRCF, and the specific touch points with existing legislation, are missing. References to the Nature Restoration Law, Common Agriculture Policy, Corporate Sustainability Reporting Directive, Green Claims Initiative and the Renewable Energy Directive but <em>“build on or play an important role</em>” is not the level of granularity the stakeholders are looking for.</p>
<p>There is a lack of clarity around the basic concepts, including the definition of high-quality removals, for how long the CO2 needs to be removed, how exactly the additionality testing will look like, and how permanence is tackled across the carbon removal activities of a very different nature. How to compare the climate impact of Direct Air Capture with Carbon Storage with soil carbon?</p>
<p>Next to public financing schemes in a few countries, voluntary carbon markets have currently been funding novel carbon removal methods. Given the lack of clarity on how different types of CRCF certificates will be used across the different uses outlined in the visual above, how will the environmental integrity of the system be ensured? How will it be guaranteed that <a href="https://bellona.org/news/carbon-dioxide-removal/2022-05-three-basics-for-the-eu-to-get-cdr-right">fossil emissions don’t end up being neutralised with short-term removals</a>? The proposal doesn’t clarify whether the certificates for the three types of carbon removal activities are fungible or should have distinct use cases.</p>
<p>Another missing element is information on how the role of CRCF is expected to change from pre-2030 to post-2030. The Sustainable Carbon Cycles Communication indicated a willingness to incorporate removals under the EU compliance frameworks post-2030, and that has been confirmed by the Commission at several events in 2022. However, the inclusion in compliance frameworks won’t work based on a voluntary tool. There is also a difference between tracking all emissions and removals versus quantifying certain additional activities. Without clarity about the end purpose/use of the CRCF, it’s impossible to judge whether it can deliver what it’s supposed to deliver.</p>
<h3>Beyond certification: credible carbon removal targets</h3>
<p>There are elements the CRCF could have included, as described above. And then there are those that the CRCF is just not designed to address but that are equally relevant in designing the EU’s carbon removal policy. Most notably, the specific carbon removal targets and corresponding <a href="https://evetamme.com/2022/02/09/cdr-policy-part-1-clarifying-net-zero/">carbon removal strategies</a>.</p>
<p>The Sustainable Carbon Cycles communication included <a href="https://evetamme.com/2021/12/15/shaping-europes-carbon-removal-policy/">a few modest aspirational targets</a>. However, aside from the overall <a href="https://www.consilium.europa.eu/en/press/press-releases/2022/11/11/fit-for-55-provisional-agreement-sets-ambitious-carbon-removal-targets-in-the-land-use-land-use-change-and-forestry-sector/">EU-level objective of 310 Mt CO2</a> <a href="https://www.consilium.europa.eu/en/press/press-releases/2022/11/11/fit-for-55-provisional-agreement-sets-ambitious-carbon-removal-targets-in-the-land-use-land-use-change-and-forestry-sector/">equivalent of net removals in the LULUCF sector in 2030</a>, the EU law does not include any other targets specifically on removals. And many carbon removal activities fall outside the LULUCF sector.</p>
<p>The recent <a href="https://energy.ec.europa.eu/communication-and-annex-guidance-ms-updated-necps-2021-2030_en">European Commission’s guidelines on National Energy and Climate Plans (NECPs)</a> highlight the need to specify the role of removals. This is a welcome development and will hopefully lead to more specifics on EU Member State’s plans for scaling up removals. The first drafts of new NECPs will be available by June 2023, with final approval planned for June 2024.</p>
<p>Zooming out from NECPs takes us to the <a href="https://unfccc.int/sites/default/files/NDC/2022-06/EU_NDC_Submission_December%202020_0.pdf">EU’s Nationally Determined Contribution</a>. In future updates, this is where the EU could pave the way with specific targets for removals beyond the LULUCF sector and inspire other countries to follow suit.</p>
<h3>Next steps</h3>
<p>The European Commission’s proposal is only the first step in a longer process. From today onwards, the European Parliament and the EU Member States will start studying the proposal and spelling out the changes they’d like to see in the text. Eventually, after the negotiations between the three EU institutions — the Commission, Parliament and the Council of the EU — lead to an agreement, we’ll end up with a piece of legislation.</p>
<p>When might that happen? The optimists are hoping for a deal by the end of 2023, the realists are counting on 2024. The EU decision-making process doesn’t have a specified timetable, it always boils down to the complexity of the subject and the political will to make progress.</p>
<p>The current European Commission and Parliament are most likely keen to finalise the CRCF before the end of their term in 2024, leaving their successors to spearhead the work on post-2030 climate policy. The latter also includes defining the EU’s climate target for 2040 and the role of carbon removal within that. There is still much work ahead in designing the EU’s carbon removal policy.</p>
<p><em>This article is also published on the <a href="https://evetamme.com/2022/11/30/eu-enters-the-race-for-carbon-removal-certification/">author&#x27;s blog</a>. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>


EU Enters The Race For Carbon Removal Certification

Let’s explore how carbon removal featured at COP27, the relevant developments in climate change negotiations, and what to watch out for through 2023 and up to COP28.

The Egyptian Presidency called COP27 the “African COP” and the “implementation COP”. The meeting in Sharm El-Sheikh could, however, also have adopted the strapline of the “removals COP”, given the levels of activity on the subject across the two-week conference.

Paul

<p>Let’s explore how carbon removal featured at COP27, the relevant developments in climate change negotiations, and what to watch out for through 2023 and up to COP28.</p>
<p>The Egyptian Presidency called COP27 the “African COP” and the “implementation COP”. The meeting in Sharm El-Sheikh could, however, also have adopted the strapline of the “removals COP”, given the levels of activity on the subject across the two-week conference.</p>
<p>The dedicated carbon removal community presence was probably the highest ever seen at a COP; more than 70 side events relating to carbon removal were listed on a <a href="https://carbonremovals.org/">virtual</a> <a href="https://carbonremovals.org/">platform</a> established by the UN Climate Change High-Level Champions Team, Carbon Gap, Open Air Collective, Rethinking Removals, Carbon Business Council and DAC Coalition. </p>
<p>Events on the side were complemented by new initiatives, for example, the <a href="http://mission-innovation.net/2022/11/17/carbon-dioxide-removal-launchpad-announced-at-cop27-governments-commit-to-build-demonstration-projects-and-share-information/">CDR Launchpad</a>, which includes a commitment to build at least one 1000+ tonne a year CDR project by 2025 by each member country — currently listing Canada, the European Commission, Japan, Norway, the United Kingdom, and the United States.</p>
<h1>COP outcome</h1>
<p>COP27 will go into history as the “Loss &amp; Damage COP”, finalising a decades-long conversation and establishing a dedicated fund to assist especially vulnerable developing countries in responding to loss and damage from climate change. While not entirely obvious on first reading, the threat of loss and damage assistance can provide <a href="https://www.bloomberg.com/news/articles/2022-11-07/cop27-how-payouts-for-loss-and-damage-fit-into-un-climate-fights">a valuable spur for large emitters to deepen their mitigation ambition</a>.</p>
<p>COP27 offered some surprises for carbon removal. For example, a <a href="https://unfccc.int/sites/default/files/resource/Presidency%20non-paper2%20on%20cover%20decisions.pdf">draft version</a> of a Cover Decision called for “developed countries to attain net-negative carbon emissions by 2030”. Such calls for developed countries to achieve net zero earlier to provide more time to developing countries have become louder in <a href="https://www.independent.co.uk/climate-change/news/india-carbon-emission-net-negative-us-b1827214.html">recent years</a>. The <a href="https://unfccc.int/sites/default/files/resource/cop27_auv_2_cover%20decision.pdf">final text</a>, as expected, did not include such a 2030 target but left anyone working “to keep 1.5C alive” disappointed — it took all efforts to keep what had been agreed a year before in Glasgow.</p>
<p>Although an inherent part of climate change mitigation, carbon removal is, in practice, still something of a separate topic operating within a bubble. Further work is needed before the subject becomes entirely mainstreamed into the broader mitigation discussions. Perhaps such separation is a good thing though, considering the particularly unique features of carbon removal. The complicating aspects, such as leakage, monitoring and reversals risk, have led to complex discussions in fora such as the Article 6.4 Supervisory Body.</p>
<p>Demystifying carbon removal should be high on the agenda in 2023, including under:</p>
<ol><li>The technical dialogues ongoing under the <a href="https://unfccc.int/topics/global-stocktake">Global Stocktake</a>.</li></ol>
<ol><li>The <a href="https://unfccc.int/documents/624428">work programme on urgently scaling up mitigation action</a> that will take place alongside the global stocktake. This may provide an opportunity to open up a dialogue on the role of carbon removal in pre-2030 mitigation. Parties and observers have until the 1st of February 2023 to submit views on suggested topics for the dialogue.</li></ol>
<ol><li>The work of the Article 6.4 Supervisory Body (SB), where <a href="https://unfccc.int/documents/624417">a request has been made for more input, by 15 March 2023</a>, regarding activities involving removal in the UNFCCC’s project-based crediting mechanism. This also creates another space for a structured conversation dedicated to the unique features of removal.</li></ol>
<h1>Removals under Article 6</h1>
<p>As an “implementation COP” would have it, the negotiations on Article 6 were increasingly technical. Lengthy discussions spanned accounting, reporting, and authorisation of units (and whether that could be revoked) under Article 6.2. The latter, together with other contentious issues like whether emission avoidance could be credited, were deferred to COP28.</p>
<p>Under Article 6.4, the question of non-authorised emission reductions (ERs) was one of the major causes of disagreement. In the <a href="https://unfccc.int/documents/624417">final text</a>, the chapter on the registry distinguishes between “authorised ERs” used towards the achievement of Nationally Determined Contributions (NDCs) or other international mitigation purposes, and “mitigation contribution ERs” used to reduce the emission levels in the Host country.</p>
<p>Among other documents, the Article 6.4 SB had prepared (3 pages of) <a href="https://unfccc.int/sites/default/files/resource/a64-sb003-a03.pdf">recommendations on carbon removal</a> for approval at CMA. These arose from SB discussions that went on into the night right before the start of the COP, and drew on <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-removals-activities">hundreds of pages of materials</a> submitted by stakeholders. Thanks to all those who responded to <a href="https://evetamme.com/2022/10/02/un-standard-setters-carbon-removal/">our previous clarion call</a>!</p>
<p>During the negotiations, countries highlighted a range of shortcomings: the language on human rights and indigenous people’s rights was lacking; civil society had not been thoroughly consulted during the preparation of the recommendations. And there were strong warnings not to adopt removal recommendations whilst the recommendations on methodologies are not yet ready. Many cross-cutting issues between the two need to move forward in lockstep. Such feedback was not surprising given the immense time pressure Article 6.4 SB had to work under to deliver recommendations on such a complex topic.</p>
<p>Our discussions in the corridors around the middle of week 2 of COP suggested that views were coalescing around the need for a structured process that took in more views and concerns from Parties and Observers, as well as ideas by which to address these concerns. So while various versions of the draft decision text appeared during the CMA negotiations, the <a href="https://unfccc.int/documents/624417">final agreement</a> reflects the consensus that was emerging in the room. The decision provides useful and practical guidance that gives Article 6.4 SB the mandate to “elaborate and further develop” their work on removal over the next year, building on stakeholder input due in March 2023.</p>
<p>The main focus for the Article 6.4 SB through 2023 covers the following:</p>
<ul><li><strong>Appropriate monitoring and reporting</strong>. Open questions remain as to the extent to which this should be different to other types of ER activities eligible for crediting under the mechanism.</li></ul>
<ul><li><strong>Accounting for removals and crediting periods</strong>. How credited removals, and in particular the timeframes for crediting and addressing reversals, can effectively dovetail with the accounting around NDCs?</li></ul>
<ul><li><strong>Addressing reversals</strong>. Who will be liable, and over what timeframe, for any intentional or unintentional depletion of enhanced carbon sinks and reservoirs arising from activities under the mechanism?</li></ul>
<ul><li><strong>Avoidance of leakage</strong>. Whether enhancing carbon sinks and reservoirs in one place could cause the depletion of carbon stocks (i.e. emissions) elsewhere, and how could this be measured and accounted for?</li></ul>
<ul><li><strong>Avoidance of other negative environmental and social impacts</strong>. Taking into account the need to first enhance and then subsequently maintain terrestrial carbon sinks and reservoirs in ways that may significantly alter the management methods applied to these resources.</li></ul>
<h1>A look towards COP28</h1>
<p>When it comes to removals, the COP27 outcome was constructive. There is now time and space to develop robust recommendations for the whole suite of carbon removal methods. This is the time Article 6.4 SB lacked in 2022 due to its late start.</p>
<p>Article 6.4 SB will prepare a dual set of recommendations on removals and methodologies that will be up for consideration by Parties at COP28. Their agenda for 2023 foresees <a href="https://unfccc.int/sites/default/files/resource/a64-sb003-a06.pdf">five meetings</a>, each lasting four days, starting in March. There will be plenty of opportunities for removals stakeholders to engage, be it via submissions and/or by attending the meetings as observers or just following the live stream.</p>
<p>The COP28 will be the “Global Stocktake COP”. This process, running from 2021 to 2023 and every 5 years thereafter, takes stock of the implementation of the Paris Agreement and has already <a href="https://unfccc.int/sites/default/files/resource/GST%20TD1_1_sreport_26_09_2022_Final.pdf">paid attention to removals</a>. There’s an expectation for another round of updated NDCs, and as the focus of NDCs and the stocktake itself is moving beyond 2030, the focus on removals is bound to increase.</p>
<p>The United Arab Emirates, as the incoming COP28 presidency, is bound to have a deep interest in carbon capture and storage (CCS) and is likely to offer these technologies a stronger platform. Since geological CO2 storage is also a key ingredient of several removal methods, broad support for both CCS and carbon removal can be expected throughout the year up to COP28.</p>
<p><em>This article is also published on the blogs of <a href="https://evetamme.com/2022/11/24/cop27-paving-the-way-for-the-removals-cop/">Eve Tamme</a> and <a href="https://www.carbon-counts.com/single-post/cop27-paving-the-way-for-the-removals-cop">Carbon Counts</a>.</em> <em>Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>


COP27: Paving the way for the “removals COP”

The spotlight on carbon removal is getting brighter. UN standard-setters have begun a crucial process to lay the groundwork for removals under the Paris Agreement. This has gone largely unnoticed by the carbon removal community, which has been mainly focusing on the voluntary carbon market. Why is this development so important? What has taken place so far? And how to get engaged?

<p>The spotlight on carbon removal is getting brighter. UN standard-setters have begun a crucial process to lay the groundwork for removals under the Paris Agreement. This has gone largely unnoticed by the carbon removal community, which has been mainly focusing on the voluntary carbon market. Why is this development so important? What has taken place so far? And how to get engaged? Learn more by reading on.</p>
<h1>Carbon markets under the Paris Agreement</h1>
<p>Article 6 is the markets clause of the Paris Agreement. It sets the basis for countries to cooperate to meet their climate targets by allowing emission reductions and removals in one country to be traded and counted towards the target of another.</p>
<p>Architects of Article 6 envisaged two ways for this cooperation to happen: one through decentralised forms of cooperation such as linkages between various national trading systems (Article 6.2), and another through a centralised UN-run pathway for countries lacking the capacity to implement trading approaches domestically (Article 6.4).</p>
<p>A 24-person Supervisory Body of national representatives was nominated to run Article 6.4 and tasked by the Glasgow COP26 to review various methodological issues, including those specific to carbon removals, and make recommendations to the COP27 in Sharm El Sheikh.</p>
<img src="https://illuminem.b-cdn.net/articlebody/d7e39b2c4fe4356fc8574734a24e73818ff60f38.png" alt="undefined">
<h1>Why should the carbon removal community pay attention?</h1>
<p>The Supervisory Body will prepare the foundation for how the UN’s carbon crediting mechanism will apply to removals. They have only begun this work and are <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-removals-activities">seeking stakeholder input</a>. How removals are included in this mechanism can have a wide-ranging impact, similar to how the Clean Development Mechanism (CDM) helped shape the voluntary market we know today.</p>
<p>Experiences with removals under the CDM were limited, whereas the voluntary carbon market has recently been more progressive in these respects. As such, the matter offers an interesting test bed to see how far voluntary standards could be accepted by policymakers at the UN level.</p>
<p>The carbon markets are in a <a href="https://evetamme.com/2022/05/16/whats-next-for-carbon-markets/">state of convergence</a>, with the voluntary markets attempting to align themselves more closely with the compliance markets and the latter trying to take advantage of the infrastructure of the former. Those voluntary market standards that are aligned with the future Article 6.4 rules could get their methodologies approved and tap into the additional demand from governments.</p>
<h1>Lack of stakeholder input to date</h1>
<p>The second Supervisory Body meeting in September had <a href="https://unfccc.int/event/Supervisory-Body-2">carbon removal firmly on its agenda</a>, and a <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-annotated-documents">call for input</a> was published shortly before. The feedback was surprisingly sparse; only <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-annotated-documents">two submissions</a> commented on carbon removal. </p>
<p>Why such limited input on removals? One of the reasons might be that many stakeholders are relatively new, focus solely on the voluntary market, and lack the understanding and expertise to feed into the UN process.</p>
<p>Those that don’t have an accredited observer status under the UNFCCC won’t be invited to participate in the Supervisory Body meetings (read <a href="https://unfccc.int/process-and-meetings/parties-non-party-stakeholders/non-party-stakeholders/overview/how-to-obtain-observer-status">how to obtain observer status</a>). In the case of for-profit entities, many don’t know whom to work with to provide input.</p>
<p>Another reason is the complexity and lack of best practices in resolving the issues at hand. The <a href="https://carbon-pulse.com/172142/">EU is also presently grappling</a> with these matters.</p>
<h1>Gaps and confusion in removals discussion</h1>
<p>The second Supervisory Body meeting demonstrated the need for the SB members and the UNFCCC Secretariat to draw upon a wider range of experts, including those in the voluntary market, as well as similar expertise that the UN brought together under the auspices of the CDM (e.g. working groups on forestry; <a href="https://cdm.unfccc.int/Panels/index.html">Carbon Capture and Storage</a>).</p>
<p>An informal sub-group of 10 members of the Supervisory Body (listed <a href="https://unfccc.int/sites/default/files/resource/a64-sb002.pdf">here</a>) is spearheading the work on removals. They provided input for the two draft documents <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-annotated-documents">shared for public input</a> before the meeting.</p>
<img src="https://illuminem.b-cdn.net/articlebody/7fca9560a8ce0d4d4bbbf78d6c942ee21a5abeee.png" alt="undefined">
<p>The interventions during the meeting included confusion over the content of the documents. Questions were raised over why tonne-year crediting has been built into the drafts when Supervisory Body members have not requested it. There are good reasons why this concept has not been featured in UN carbon crediting mechanisms to date (here is an example of a more <a href="https://carbonplan.org/research/ton-year-explainer">recent criticism</a>). Another frequent comment was the lack of inclusion of good practices built on decades of work in carbon markets, such as jurisdictional crediting for natural carbon stocks. Conversely, the recommendations drew heavily from prior experience in other areas, such as <a href="https://www.slideshare.net/PaulZakkour1/ccs-in-the-clean-development-mechanism-cdm">geological carbon storage</a>.</p>
<p>The participants agreed that the documents went into too much detail, while at the same time lacked clarity around the options to deal with the complex methodological issues at hand (esp. boundaries, leakage, non-permanence, liability and accounting).</p>
<p>A third document was drafted during the meeting. There was no agreement on whether the work should be about carbon or greenhouse gas removal, despite looking at three different definitions.</p>
<p>One member asked for clarification on whether reversals from carbon storage should be tackled under removal work, or under emission reductions, given that geological storage technology features in both.</p>
<p>Throughout the meeting, several Supervisory Body members repeatedly requested further input from stakeholders on carbon removal. All in all, three separate working documents were discussed, but there remained quite a bit of confusion around the basics. No final decisions were taken, and the informal carbon removal working group will return to the drawing board to prepare for the upcoming meeting.</p>
<p>The goal now will be to prepare a broader set of recommendations that apply to the full spectrum of carbon removal methods. It is essential to get it right, given that, as one member put it, “what we adopt here will be the foundation of every single future decision we adopt on removals”.</p>
<h1>Get engaged</h1>
<p>There are many ways to advocate for a robust carbon removal framework and methodologies in the UN’s carbon crediting mechanism, such as following and taking part in the Supervisory Body meetings, responding to official calls for input, and conducting capacity building with those involved.</p>
<p><a href="https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism/calls-for-input/sb002-removals-activities">A new call for input with a deadline of 11 October</a> was just launched and will feed into the third meeting of the Supervisory Body that will take place 2-5 November in Sharm El-Sheikh. Accredited observers to the UNFCCC can register to attend the meeting until October 13th.</p>
<p>It’s time to read up, get engaged, establish expertise and/or collaborate with those who have it, and help shape the global rules for carbon removal.</p>
<p><em>This article is also published on the blogs of</em> <a href="https://evetamme.com/2022/10/02/un-standard-setters-carbon-removal/"><em>Eve Tamme</em></a> <em>and</em> <em><a href="https://www.carbon-counts.com/single-post/un-standard-setters-turn-their-attention-to-carbon-removal">Carbon Counts.</a> Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.</em></p>


UN standard-setters turn their attention to carbon removal

Doubling down on its global climate leadership, the European Union (EU) is pioneering a certification mechanism for carbon dioxide removals (CDR). While policymakers must continue to focus on rapid, near-term reduction of emissions, it has become abundantly clear that the world will need to draw large amounts of carbon dioxide out of the atmosphere through CDR.

Eadbhard

Kathy

<p>Doubling down on its global climate leadership, the European Union (EU) is pioneering a certification mechanism for carbon dioxide removals (CDR). While policymakers must continue to focus on rapid, near-term reduction of emissions, it has become abundantly clear that the world will need to draw large amounts of carbon dioxide out of the atmosphere through CDR. While several EU Member States have already begun developing policies to support CDR, gaps remain at the EU level. With the forthcoming certification mechanism, the EU has the unique opportunity to safeguard CDR’s climate value by setting a global standard for other countries to follow.</p>
<p>The latest report from Working Group III of the Intergovernmental Panel on Climate Change (IPCC) confirms CDR is <a href="https://www.catf.us/2022/04/what-does-latest-ipcc-report-say-about-carbon-capture/">an essential tool in the climate toolbox</a>. In fact, even if the world succeeds at dramatically cutting emissions in the near-term, we are still expected to need hundreds of gigatonnes of CDR cumulatively by the end of the century. The IPCC highlights that CDR can help reduce net emissions in the near-term, counterbalance residual emissions, and achieve and sustain net-negative emissions in the long-term.</p>
<p>But for CDR to fulfill these roles in climate mitigation, it must be rigorously measured, well-governed, and scaled-up through dedicated incentive regimes. Currently, there are no widely accepted standards for CDR certification and existing informal rules are driven by private initiatives. The absence of regulation creates substantial risks for the environment and for consumer protection, as many CO2 removal claims often lack methodological or technical transparency as well as comparability. Furthermore, regulatory intervention is needed to safeguard the climate benefits of scaling permanent CDR. By introducing much-needed clarity, the EU’s certification mechanism is poised to lay the foundation for responsible CDR deployment in Europe as part of the bloc’s path to climate neutrality. A rigorous certification mechanism would provide a strong signal of political support and would bolster public trust that CDR provides reliable climate benefits. Thus, the upcoming EU legislation should ensure that carbon removals certified under this mechanism are real, measurable, additional, permanent, do not result in leakage, and avoid double counting. </p>
<p>Carbon removal certification also presents an excellent opportunity for the EU to break the conventional <a href="https://www.nature.com/articles/s41558-019-0661-z">fault lines between natural vs. technological CDR methods</a>. This unhelpful dichotomy has not only failed to provide clarity on the quality of removals, but also distracts from the issue of permanence, creates confusion via various interpretations and divides stakeholders. The best way forward would be to emulate the IPCC’s approach and clearly categorize and certify CDR methods based on the removal process (e.g., land-based, ocean-based, geochemical, or chemical) and estimated timescale of carbon storage (e.g., decades to centuries, centuries to millennia, beyond ten thousand years). Carbon removal options shouldn’t be a question of picking favored technologies, but a question of the permanent removal of harmful emissions from our atmosphere.</p>
<p>A rigorous certification mechanism would also enable the incentivization of a substantial scaling-up of CDR methods in the EU to help achieve climate neutrality by 2050. Requiring robust monitoring, reporting, and verification as well as public disclosure of credits used in voluntary and compliance markets can help to avoid double-counting, thereby further building public trust and climate benefit alike.</p>
<p>The certification mechanism is also expected to guide the voluntary carbon market in the private sector. The role of the private sector in advancing CDR is growing, and the collaboration between the public and private sector will determine the success of the certification mechanism. It is therefore crucial to provide stakeholders with a clear indication of how the certification mechanism will apply to voluntary and compliance markets, and how this will evolve over the next decades.</p>
<p>CDR represents an essential suite of options for helping to address the climate crisis. If CDR is to fulfill its climate value, it must be stringently regulated with global standards to ensure quality and permanence. As it pioneers the CDR certification mechanism over the months ahead, the European Commission has an unparalleled responsibility to adopt the highest environmental standards, so that it can further bolster the EU’s credibility as a climate leader and provide a global gold standard for CDR certification.</p>
<h1><strong>Key Recommendations</strong></h1>
<ol><li>The upcoming EU legislation should ensure that carbon removals certified under this mechanism are real, measurable, additional, permanent, do not result in leakage, and avoid double counting.</li></ol>
<ol><li>The EU should establish clear institutional roles to oversee and implement the certification framework, ensuring robust governance and compliance.</li></ol>
<ol><li>The EU should establish advisory boards at the EU-level to ensure harmony across the bloc and high standards of the certification mechanism. These could include a scientific advisory board to achieve excellence with regards to scientific evidence and rigor; and an advisory board consisting of market participants as well as other civil society stakeholders to inform the evolution of the certification mechanism.</li></ol>
<ol><li>The EU should provide stakeholders with a clear indication on how the certification mechanism will feed into the voluntary and compliance markets, and how this is expected to evolve over the next decades.</li></ol>
<p>In establishing the certification mechanism, it is essential that the Commission ensure the mechanism includes only methods which adhere to basic minimum principles for CDR.</p>
<img src="https://illuminem.b-cdn.net/articlebody/ef9023ddf75ffa9a3d17fda4544e76dba503c712.png" alt="undefined">
<p>The principles guiding Carbon Dioxide Removal Certification are:</p>
<ul><li><strong>Real</strong> – CO2 is removed from the atmosphere and durably stored. </li></ul>
<ul><li><strong>Measurable</strong> – The removed CO2 is quantified via robust monitoring, reporting and verification rules. </li></ul>
<ul><li><strong>Permanent</strong> – Where the durability of CO2 storage is not long-term (beyond 1000 years), legal and financial mechanisms ensure the permanence of CO2 storage in perpetuity. </li></ul>
<ul><li><strong>Additionality</strong> – CDR activities are additional to those required by existing policies and regulations. For example, these activities will not occur in the absence of financing from selling carbon credits, where such financing is used. </li></ul>
<ul><li><strong>Avoidance of leakage –</strong> Removal activities do not cause emissions at other geographical locations due to market changes or other shifts. A robust consequential life cycle assessment with cradle-to-grave system boundaries is required to ensure this. The potential for physical leakage from CO2 storage sites is addressed via legal and financial mechanisms. </li></ul>
<ul><li><strong>Avoidance of double counting</strong> – Certificates for removals for the same activity are not issued, used or claimed by more than one entity. This is highly relevant given that the certification for carbon removals is expected to leverage voluntary carbon markets, and that carbon removals are also considered to be integrated into the EU regulatory and compliance frameworks. </li></ul>
<ul><li><strong>Sustainability</strong> – Negative externalities which can stem from both social and environmental implications of CDR are addressed through strict regulation to ensure that CDR projects result in no net-harm to the environment and people.</li></ul>
<p><em>This article is also published by the <a href="https://www.catf.us/2022/05/eu-pioneers-carbon-removals-certification-key-recommendations-principles/">Clean Air Task Force</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.</em></p>


EU pioneers carbon removals certification: Key recommendations and principles

The carbon markets are experiencing rapid growth. The voluntary markets are expanding due to unprecedented demand from corporate buyers and a related boom in issuing new credits. The compliance markets are growing via increased allowance prices and soon also through the emerging Paris Agreement market. All the while, the two markets are increasingly converging, and the voluntary market is bound to go through substantial changes. Will there be a competition between voluntary and compliance buyers for the same credits? The next years will show. Eventually, the carbon markets will become carbon removal markets.

<p>The carbon markets are experiencing rapid growth. The voluntary markets are expanding due to unprecedented demand from corporate buyers and a related boom in issuing new credits. The compliance markets are growing via increased allowance prices and soon also through the emerging Paris Agreement market. All the while, the two markets are increasingly converging, and the voluntary market is bound to go through substantial changes. Will there be a competition between voluntary and compliance buyers for the same credits? The next years will show. Eventually, the carbon markets will become carbon removal markets.</p>
<h1>Growing for different reasons</h1>
<p>Both the voluntary and compliance carbon markets are growing. Based on the 2021 data, the <a href="https://www.ecosystemmarketplace.com/articles/voluntary-carbon-markets-top-1-billion-in-2021-with-newly-reported-trades-special-ecosystem-marketplace-cop26-bulletin/">voluntary carbon market size reached $1bn</a>, while the <a href="https://www.reuters.com/business/energy/global-carbon-markets-value-surged-record-851-bln-last-year-refinitiv-2022-01-31/">compliance markets increased to $851bn</a>. Even with a conservative estimate for the compliance markets – given the recent price fluctuations – the voluntary market accounts for 0.1-0.2% of the compliance and voluntary markets combined.</p>
<p>The drivers behind the growth in these two markets are different. The market size is calculated based on the number of carbon credits or allowances, multiplied by their price. <strong>The growth in the voluntary market was driven by an increase in the number of carbon credits</strong> to 300Mt CO2e, as seen below.</p>
<img src="https://illuminem.b-cdn.net/articlebody/648e9e7cfa66b67f59c80973b490b27f7de58dcd.png" alt="Figure 1: The size of the voluntary carbon market. Based on data from the Ecosystem Marketplace">
<p><strong>For the compliance markets, the driver of the 164% growth compared to the previous year has been the increase in the price of its carbon allowances.</strong> This has been driven by the world’s most established carbon market, the EU Emissions Trading System (EU ETS), which makes up 90% of the global value of the compliance markets today.</p>
<img src="https://illuminem.b-cdn.net/articlebody/dabf2236c8f668a2af2b6a85f4c378a62462593c.png" alt="Figure 2: The price of allowances in the emission trading systems. Source: Emissions Trading Worldwide: 2022 ICAP Status Report (https://icapcarbonaction.com/en/publications/emissions-trading-worldwide-2022-icap-status-report)">
<p>As of January 2022, there are a total of <a href="https://icapcarbonaction.com/en/publications/emissions-trading-worldwide-2022-icap-status-report">25 emission trading systems in force that cover 17% of global emissions</a>. The EU ETS stands out as a success story that has been close to 20 years in the making. Its decreasing cap keeps the upward pressure on allowance prices, pending the outcome of the ongoing review of the legislation. Currently, compliance markets consist of the emissions trading systems, and the recent <a href="https://icapcarbonaction.com/en/publications/emissions-trading-worldwide-2022-icap-status-report">ICAP report</a> is a treasure trove of facts, graphics and analysis of the global progress in this space.</p>
<h1>Comparing the market size only tells part of the story</h1>
<h2>Impact on reducing emissions</h2>
<p>There is more nuance in comparing the size of compliance and voluntary markets than may seem obvious at first glance. As explained above, the market size is derived from the number of credits or allowances and their price. Both the baseline and crediting systems that use carbon credits, and emissions trading systems that use allowances, put a price on carbon. However, <strong>the climate impact of a carbon credit is different from that of an allowance.</strong></p>
<p>Carbon credit reflects a 100% reduction or removal of greenhouse gases, whilst allowance provides the right to pollute in trading system that delivers a small percentage of real emission reductions. Hence, <strong>only a fraction of the $851bn compliance market size directly represents emission reductions</strong>.</p>
<img src="https://illuminem.b-cdn.net/articlebody/550bae0ad3a54f89b8935175676d9ebc01cfde7a.png" alt="Table 1: The difference between the carbon credits and allowances">
<p>A substantially simplified table above highlights the role of carbon credits and allowances in addressing climate change. One carbon credit equals one tonne of CO2 equivalent reduced or removed in the ideal circumstances that we should strive for with a laser-sharp focus. Unfortunately, there is an abundance of cheap low quality credits circulating in the voluntary market that don’t reflect such climate impact. Not all carbon credits are used as offsets; there are also <a href="https://illuminem.com/energyvoices/2c834cbb-1ac5-427d-b194-5c5291c64813">other opportunities to leverage their impact</a>.</p>
<p>The decreasing cap of the trading system and the resulting scarcity of allowances is what are expected to drive down emissions under the trading systems. For example, the companies covered by the <a href="https://ec.europa.eu/clima/eu-action/eu-emissions-trading-system-eu-ets_en">ETS reduced emissions by about 35% between 2005 and 2019 – that is, on average, 2.5% per year.</a> However, not all emissions trading systems are successful in delivering emission reductions, and not all emission reductions happen as a result of trading systems. Compliance markets don’t operate in isolation from other policies. Sometimes, other policy tools can be more successful in decarbonising different parts of the economy. It’s important to attribute the results to the policies that actually deliver these.</p>
<h2>Impact on financing climate action</h2>
<p>Another aspect is the financial flows that voluntary and compliance markets generate. When it comes to the voluntary market, the $1bn market size had an <a href="https://www.ecosystemmarketplace.com/articles/voluntary-carbon-markets-top-1-billion-in-2021-with-newly-reported-trades-special-ecosystem-marketplace-cop26-bulletin/">average price of carbon credit of $3.37</a> in 2021. This is clearly not enough to deliver high integrity climate projects. Besides the <a href="https://www.bloomberg.com/news/features/2020-12-17/the-real-trees-delivering-fake-climate-progress-for-corporate-america">additionality-related challenges</a> in the voluntary market, there’s also the pressing question around the <a href="https://unearthed.greenpeace.org/2022/05/02/carbon-offsetting-market-climate/">money-making middlemen</a>. It’s important that the projects deliver actual additional climate impact and that the funding reaches those on the ground.</p>
<p>By the end of 2021, emission trading systems raised <a href="https://icapcarbonaction.com/en/publications/emissions-trading-worldwide-2022-icap-status-report">$161bn</a> cumulatively for climate action. The EU ETS has delivered the majority of it by raising $117bn in auctioning revenues. When compared to the market size of $851bn in 2021, one would expect that more money could have been put to purposeful use to date.</p>
<h1>The two markets are converging</h1>
<p><strong>The voluntary and compliance markets are getting increasingly interlinked, and the lines between the two are blurring.</strong> This will lead to the voluntary market going through a major change and looking quite different by the end of the decade.</p>
<p>Today, the compliance markets consist of emissions trading systems. This is bound to change with the emerging compliance markets under the Paris Agreement. <strong>Article 6 of the Paris Agreement allows countries to collaborate in order to achieve their climate targets. This will increase the scope of compliance markets.</strong> Such cooperation can take different forms, from emission reduction and carbon removal projects to linking their emissions trading systems. Compared to the Kyoto protocol era, all countries are covered with climate targets under the Paris Agreement, and the trade with the international carbon credits under Article 6 will need to be transparently recorded to avoid double counting.</p>
<p><strong>Compliance markets have been leveraging voluntary market credits and standards for quite a while.</strong> California’s emissions trading system and the offsetting scheme for international aviation allow the use of certain voluntary market carbon credits. The same goes for carbon taxes established in Colombia and South Africa. Using the infrastructure of the voluntary market in the context of the Paris Agreement compliance markets makes a lot of sense. Why spend resources to establish new standards and methodologies if one can use infrastructure that is already there? A good example here is the partnership between the Swedish government and the <a href="https://www.goldstandard.org/">Gold Standard</a>, where the plan is to <a href="https://www.greenbiz.com/article/article-6-creates-two-kinds-carbon-credits-what-means-business">use Gold Standard at least for part of Sweden’s acquisition of international units under Article 6. The Gold Standard has also es</a>tablished their <a href="https://www.goldstandard.org/blog-item/article-6-early-mover-programme">Article 6 early mover programme</a>.</p>
<p></p>
<blockquote><em>“We’re entering a phase where the standards won’t just be used for the voluntary market but will be used by governments for compliance schemes and tax schemes. […] <strong>So rather than there being this isolation between the voluntary market and compliance markets, you have kind of this greater carbon credit, which can be used in all these different markets.</strong> And I think that’s good. That allows you to scale, because you’ve got all of these different uses that credits can be used for.”<br/><br/><strong>Hugh Salway</strong>, Gold Standard, in an <a href="https://www.greenbiz.com/article/article-6-creates-two-kinds-carbon-credits-what-means-business">interview with GreenBiz, 2021</a>​ </em></blockquote>
<p><em></em></p>
<p>Another development to notice is the <strong>growth in the number of domestic crediting systems</strong> where governments set the rules for generating credits from domestic projects. This allows governments to guide investments to certain types of emission reduction or carbon removal projects and tap into the demand from corporate buyers without any of the challenges around international transactions where the implementation still needs to be put in place.</p>
<p>What about the timeline of the convergence of the voluntary and compliance markets? <strong>Seasoned carbon market experts suggest that the voluntary market might be absorbed by Article 6 market</strong> <strong><a href="https://globalroadtechnology.com/qa-series-peter-zaman-jo-garland/">already around 2025</a>.</strong></p>
<h2>Emerging competition</h2>
<p>The rulebook for Article 6 that was agreed upon at the COP26 did not include explicit references to the voluntary market. However, it includes a crucial element where <strong>the governments, as gatekeepers, can decide whether they require voluntary market credits to be authorised and the country’s emission balance</strong> <strong>adjusted</strong>. Work on the further details of implementing Article 6 is ongoing, and further important details may emerge.</p>
<p>If the voluntary market starts catering for the compliance markets, the demand side expands, but the supply stays the same.</p>
<p></p>
<blockquote><em>“<strong>Voluntary buyers are going to start competing with mandatory/compliance buyers, very possibly for the exact same offsets</strong>. The procedures to verify and issue carbon offsets to the voluntary or to the Article 6 markets may not be very different, and this is going to present some participants with an interesting dilemma.”<br/><br/><strong>Alessandro Vitelli</strong> at <a href="https://www.carbonreporter.com/post/the-problem-with-crypto-carbon">carbonreporter.com, 2021</a>​ </em></blockquote>
<p><em></em></p>
<p>Such a development could lead to countries and their corporates chasing the same carbon credits. Governments have the upper hand in such competition. If they are keen to secure a supply of certain credits, they can regulate related activities, which would essentially nationalise the (part of or whole) project. To add to the uncertainty – this may happen at any stage of the ongoing project.</p>
<p><strong>The end result of the level of convergence depends on decisions that have yet to be taken</strong>. One of the key elements is how widely governments require voluntary market projects to be authorised by them. The voluntary market actors can play a range of roles, but the government is the gatekeeper in the decision making.</p>
<h1>Supply and demand</h1>
<p>By 2030, estimates suggest that the voluntary market could scale to <a href="https://www.iif.com/Portals/1/Files/TSVCM_Summary.pdf">well over $100 billion per year</a>. We established above that in addition to the corporate demand, there will be an increasing demand from compliance markets for voluntary market credits. It’s unlikely that the compliance market demand will reach the levels seen during the Kyoto era when participants of the EU ETS used over <a href="https://ec.europa.eu/clima/eu-action/eu-emissions-trading-system-eu-ets/use-international-credits_en">one billion tonnes of international credits in 2008-2012</a>, mostly from the Clean Development Mechanism. After learning the lesson of the surplus this created in the trading system, the EU has since opted for domestic climate targets.</p>
<p>The majority of countries intend to use the Article 6 compliance markets to achieve their climate targets. It makes sense, given that the low hanging fruits in decarbonisation will be picked soon, and countries have very different emission reduction and carbon removal capacities. However, all countries have climate targets they need to meet, and any sold international credits require revising the national emission tally upwards to avoid double counting. This will make all countries cautious in their decisions to sell carbon credits.</p>
<p>Another potential source of demand from the compliance markets (for both voluntary market and Article 6 credits) is the offsetting scheme for international aviation (CORSIA). However, given the recent change in the baseline, the system might not generate much demand any time soon.</p>
<p><strong>The challenge the voluntary market is currently facing is the supply of high-quality credits</strong>. The controversial news around the quality of offsets is driving corporates to find that middle ground that can be transparently confirmed as not greenwashing, but that still includes a price per ton that the boards find reasonable.</p>
<p><strong>The future of the voluntary market depends on how well it is structured and governed</strong>. The <a href="https://icvcm.org/">Integrity Council for the Voluntary Carbon Market</a> is working to accelerate the growth (supply), and the <a href="https://vcmintegrity.org/">Voluntary Markets Integrity Initiative</a> focuses on participation and demand. These and other organisations can help create a quality supply of credits, a deep and liquid market and add to the transparency.</p>
<h1>Carbon markets will become carbon removal markets</h1>
<p><strong>Looking further into the future, carbon markets will eventually become carbon removal markets.</strong> This is, provided that the world delivers on rapid and steep emission reductions, and by mid-century, removals are used to balance the small amount of <a href="https://evetamme.com/2022/02/09/cdr-policy-part-1-clarifying-net-zero/">residual emissions,</a> followed by <a href="https://evetamme.com/2022/04/06/ar6-wgiii-report-carbon-removal/">net negative emissions</a>. The governments and corporates are taking on net-zero commitments. The <a href="https://sciencebasedtargets.org/">SBTi</a> — which has emerged as the benchmark for ambitious corporate commitments — and the <a href="https://www.iigcc.org/resource/net-zero-investment-framework-implementation-guide/">Net Zero Investment Framework</a> only <a href="https://openknowledge.worldbank.org/handle/10986/35620">allow removals</a> to be claimed toward net-zero commitments.</p>
<p>Withing the compliance markets, some emissions trading systems have used removals by allowing that type of carbon credits to be used for compliance. The consideration of <a href="https://evetamme.com/2022/02/23/negative-emissions-eu-ets/">using trading systems to facilitate the deployment of removals</a> has started and will pick up pace over the coming years.</p>
<p><strong>In the voluntary markets, there is an increasing focus on removals, although removal credits still make up a small fraction of the voluntary market, and a vast majority of those credits don’t offer long-term durability.</strong> Meanwhile, the removal credits are getting more and more traction among corporate buyers. Standards and marketplaces like <a href="https://puro.earth/">Puro.earth</a> that focus exclusively on removals are experiencing rapid growth. Stakeholders are keen to get their hands on credits that represent high-quality removals.</p>
<p>The convergence of the voluntary and compliance markets will also play out in the context of removals. It will take a little longer for those carbon removal methods where the accounting rules are not yet widely established and no global standards exist. Given the speed and flexibility of the voluntary market standards, they are well placed to contribute and fill the gap. However, the voluntary market can not drive the deployment of removals on the scale needed, and strong policy support will need to emerge from the public sector. The <a href="https://evetamme.com/2021/12/15/shaping-europes-carbon-removal-policy/">EU’s carbon removal certification</a> is one initiative to keep an eye on. Many <a href="https://evetamme.com/2022/02/23/negative-emissions-eu-ets/">other policy tools</a> are being pioneered around the world.</p>
<p>There is already a <a href="https://carbon-pulse.com/158473/">price difference</a> between removal credits compared to emission reduction credits, the former being more expensive. This trend will continue. The size of the global carbon removal market can grow to $1 trillion when considering the scale of 10Gt at $100 per tonne.</p>
<p><em>This article is also published on the <a href="https://evetamme.com/2022/05/16/whats-next-for-carbon-markets/">author&#x27;s blog</a>. Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.</em></p>


What’s next for carbon markets?

The new IPCC report Climate Change 2022: Mitigation of Climate Change has brought carbon removal to the centre stage of climate mitigation as an essential and unavoidable tool to achieve net-zero GHG emissions.

<p>The new IPCC report <a href="https://www.ipcc.ch/report/ar6/wg3/">Climate Change 2022: Mitigation of Climate Change</a> has brought carbon removal to the centre stage of climate mitigation as an <strong>essential</strong> and <strong>unavoidable</strong> tool to achieve net-zero GHG emissions.</p>
<p>Every five to seven years, the IPCC publishes comprehensive scientific assessment reports. Their previous, <a href="https://www.ipcc.ch/report/ar5/syr/">Fifth Assessment Report (2014)</a>, provided the main scientific input to the Paris Agreement. Since then, the IPCC has published three Special Reports: on <a href="https://www.ipcc.ch/sr15/">Global Warming of 1.5°</a>, <a href="https://www.ipcc.ch/srccl/">Climate Change and Land</a>, and <a href="https://www.ipcc.ch/srocc/">Ocean and Cryosphere</a>.</p>
<p>The upcoming Sixth Assessment Report (AR6) consists of the three Working Group contributions (published) and a Synthesis Report (due in September 2022), which integrates the Working Group assessments and the three Special Reports (listed above) produced during the cycle.</p>
<p>Let’s have a closer look at the most recent contribution to AR6 that was published on 4 April 2022 – <a href="https://www.ipcc.ch/report/ar6/wg3/">Climate Change 2022: Mitigation of Climate Change</a> – and how this report is shaping the carbon removal narrative, terminology and categorisation.</p>
<h1>Carbon removal definition – strong and consistent</h1>
<p>The definition of carbon dioxide removal that the IPCC introduced in their Special Report on 1.5° has been kept the same in the new report: <em>“CDR refers to anthropogenic activities that remove CO2 from the atmosphere and store it durably in geological, terrestrial, or ocean reservoirs, or in products.”</em></p>
<img src="https://illuminem.b-cdn.net/articlebody/ceea13bafdbe7b6db6590e9cac35583a4c8d83ce.png" alt="Figure 1: Definition of carbon removal, Based on Working Group III contribution to the IPCC AR6, 2022 (https://www.ipcc.ch/report/ar6/wg3/)">
<h1>Narrative change – the three objectives of carbon removal</h1>
<p>Whilst the Special Report on 1.5° listed two key objectives or roles for carbon removal, the <a href="https://www.ipcc.ch/report/ar6/wg3/">2022 Mitigation of Climate Change</a> refines the language and <strong>introduces a third, near-term objective.</strong> This has featured in literature <a href="https://www.frontiersin.org/articles/10.3389/fclim.2021.672996/full">before</a> – synthesising existing literature is what the IPCC reports do – and will undoubtedly play a strong role in the carbon removal advocacy space in years to come.</p>
<p>Here are the <strong>three roles of carbon removal</strong> outlined in the new IPCC report.</p>
<img src="https://illuminem.b-cdn.net/articlebody/de0fc68ce59138788c42192e252334cf8109fddc.png" alt="Figure 2: Based on Working Group III contribution to the IPCC AR6, 2022 (https://www.ipcc.ch/report/ar6/wg3/)">
<h1>“CDR methods” wins the terminology competition</h1>
<p>Today, there is no commonly agreed practice on how to refer to activities that remove CO2 from the atmosphere. CDR approaches, options, solutions, systems, techniques, measures and methods have often been used interchangeably. The IPCC Special Report on 1.5° mostly used “CDR measures”. The flagship report <a href="https://cdrprimer.org/">CDR Primer (2021)</a> chose “CDR approaches” for their terminology and I’ve been using it ever since. The third instalment of the AR6, however, uses <strong>“CDR methods”</strong> almost consistently throughout the 2913 pages. Sounds great!</p>
<img src="https://illuminem.b-cdn.net/articlebody/9cc19b15057d055b9ffabb3ba8ad5c94c46fa88b.png" alt="Figure 3: “CDR methods” is the most widely used term to refer to activities that remove CO2 from the atmosphere in the Working Group III contribution to the IPCC AR6, 2022 (https://www.ipcc.ch/report/ar6/wg3/)">
<p>The term <strong>“negative emissions”</strong> is not interchangeable with carbon removal. It is used “<em>only when referring to the net emissions outcome at a systems level (e.g., net negative emissions at global, national, sectoral or supply chain levels).</em>” This is a practical approach and clarifies the relationship between carbon removal (an activity that removes CO2) and “net negative emissions” (describing negative carbon flows on systems-level).</p>
<h1>Carbon removal categorisation – will the “nature vs technology” be finally sidelined?</h1>
<p>The IPCC Special Report on 1.5° divides carbon removal methods based on the removal process into natural and chemical. This wasn’t widely adopted. Instead, the most common way of categorising carbon removal methods has been between natural vs technological, or at times natural vs mixed vs technological. Such categorisation is unhelpful for a <a href="https://www.nature.com/articles/s41558-019-0661-z">wide range of reasons</a>, including the fact that what is natural or technological, is still interpreted very differently by stakeholders.</p>
<p>The world of carbon removal methods is very broad. There is so much more than the usual suspects that have received the most attention so far. Many methods combine a wide range of solutions or technologies within them. I’m yet to see a take where emission reduction technologies are squeezed into natural vs technological categories. Why should we keep doing the same with carbon removal methods?</p>
<p>The new IPCC Report builds on the categorisation based on the removal process and on the timescale of storage as described below.</p>
<img src="https://illuminem.b-cdn.net/articlebody/646845a0ce53057442e784679c7b54df39193281.png" alt="Figure 4: Description of carbon removal methods. Source: Working Group III contribution to the IPCC AR6, 2022 (https://www.ipcc.ch/report/ar6/wg3/)">
<p>The categorisation is based on the role of CDR methods in the carbon cycle, i.e., on the removal process (land-based biological; ocean-based biological; geochemical; chemical) and on the timescale of storage (decades to centuries; centuries to millennia; ten thousand years or longer).</p>
<p>Let’s see if this taxonomy will be picked up more widely and used to replace the commonplace but less than ideal “nature vs technology”. From the communication perspective, it does make the picture more complex. However, it does an excellent job characterising the wide range of methods.</p>
<h1>The two net-zeros</h1>
<p>Net-zero greenhouse gas emissions can only be achieved after achieving net-zero CO2 emissions. I’ve written about it <a href="https://evetamme.com/2022/03/08/carbon-neutrality-to-climate-neutrality/">previously</a> and it’s useful to have this clarified in writing in the new IPCC Report. A steep scale-up of removals is needed on the road to net-zero GHG emissions because one step on that path is achieving net-zero CO2 emissions. For example, for Europe to achieve climate neutrality by 2050, it will need to achieve net-zero CO2 emissions sometime around 2040.</p>
<blockquote>“For most choices of GHG emissions metric, reaching net-zero GHG emissions requires net negative CO2 emissions in order to balance residual CH4, N2O and F-gas emissions. Under foreseen technology developments, some CH4, N2O and F-gas emissions from, e.g., agriculture and industry will remain over the course of this century. <strong>Net negative CO2</strong> <strong>emissions will therefore be needed to balance these remaining non-CO2 GHG emissions to obtain net-zero GHG emissions at a point in time after net-zero CO2</strong> <strong>has been reached in emissions pathways.</strong> Both the amount of net negative CO2 emissions and the time lag to reaching net-zero GHG depend on the choice of GHG emission metric.”<br/><br/><a href="https://www.ipcc.ch/report/ar6/wg3/">Working Group III contribution to the IPCC AR6, 2022</a>​ </blockquote>
<h1>Final Words</h1>
<p>The new IPCC report <a href="https://www.ipcc.ch/report/ar6/wg3/">Climate Change 2022: Mitigation of Climate Change</a> has done what was expected – outlining how mitigation can address climate change, based on the most recent literature. Having this thorough analysis of literature is imperative for areas where many new solutions have emerged or developed further over the last decade. This report brought <strong>carbon removal</strong> to the centre stage of climate mitigation as an <strong>essential</strong> and <strong>unavoidable</strong> tool to achieve net-zero GHG emissions.</p>
<p><br/><em>This article is also published on the <a href="https://evetamme.com/2022/04/06/ar6-wgiii-report-carbon-removal/"><span class="unknown__pt__mark__460e8095be9b">author&#x27;s blog</span></a>.</em> <em>Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.</em></p>


The New IPCC Report – Carbon Removal Narrative

Whenever net-zero targets are used, we have to understand what kind of targets these are. Net-zero as a headline target is vague. That is where the question “Net-zero what?” is coming from. When countries first started announcing their net-zero targets, one of the big questions was whether these targets covered only carbon dioxide emissions or all greenhouse gases (GHGs) – carbon dioxide, methane, nitrous oxide, F-gases and SF6.

<p>The first time I put together a visual on net-zero vocabulary was <a href="https://www.linkedin.com/posts/evetamme_netzero-climatechange-policy-activity-6716773147280052224--ABB/">back in 2019</a>. That slide went on to have a life of its own and was used in presentations by climate policy experts and as a learning tool for a wide range of stakeholders. Things have changed over the last couple of years and it is time for an update.</p>
<p>Whenever net-zero targets are used, we have to understand what kind of targets these are. Net-zero as a headline target is <a href="https://evetamme.com/2022/02/09/cdr-policy-part-1-clarifying-net-zero/">vague</a>. That is where the question “Net-zero what?” is coming from. When countries first started announcing their net-zero targets, one of the big questions [1] was whether these targets covered only carbon dioxide emissions or all greenhouse gases (GHGs) – carbon dioxide, methane, nitrous oxide, F-gases and SF6.</p>
<img src="https://illuminem.b-cdn.net/articlebody/fe91c95393bdd7f17e42c53029b1548e7ad51bc4.png" alt="Figure 1: A simplified overview of net-zero vocabulary">
<p>Why is it important to know whether targets cover only CO2 or all GHGs? Because this makes a huge difference in climate ambition. WRI’s graph below illustrates that the timeline between net-zero carbon and net-zero GHG emissions can be 15-20 years, or even more when looking at targets further away. For example, the EU has taken on a climate neutrality target by 2050. This means that it will be carbon neutral already around 2040.</p>
<img src="https://illuminem.b-cdn.net/articlebody/aadf4fa4a1243575ce16c90142487be730c3f7ca.png" alt="Figure 2: Timeline of what limiting global warming to 1.5°C and 2°C entail. Source: World Resources Institute, 2019 (https://www.wri.org/insights/net-zero-ghg-emissions-questions-answered)">
<p>There is still some confusion around how these terms are used.</p>
<p>In 2019 when China’s Xi Jinping first announced the carbon neutrality target by 2060, it seemed to mean what the headline target said – carbon neutrality. Only CO2 coverage. Which translates into climate neutrality sometime around 2080. After almost a year of confusion, in the summer of 2020, China’s special envoy for climate change affairs Xie Zhenhua confirmed that this target actually includes all greenhouse gases. This is an example where a country uses the term carbon neutrality with the meaning of climate neutrality.</p>
<p>A different example comes from the IEA. Their landmark <a href="https://www.iea.org/reports/net-zero-by-2050">Net Zero by 2050</a> report only includes CO2, despite the fact that the majority of net-zero targets and literature by now use this term as a short for net-zero GHG emissions.</p>
<h1>The nuance</h1>
<p>Whilst the simplified approach visualised above works for many purposes, there is more to how these terms have been defined in practice. Carbon neutrality and net-zero CO2 emissions are equivalent terms on a global scale. The scope of climate neutrality, however, is slightly wider than that of net-zero GHG emissions.</p>
<blockquote>“Although climate neutrality is sometimes used interchangeably with the term net-zero emissions, there is a subtle difference between the terms. Net-zero emissions refers to balancing anthropogenic GHG emissions released into the atmosphere with removals of these emissions over a specified period whereas climate neutrality refers to the balancing of residual emissions with removals and takes into account wider biogeophysical effects of human activities on the climate system overall.”<br/><br/>Jeudy-Hugo, S., L. Lo Re and C. Falduto (2021), <a href="https://www.oecd-ilibrary.org/environment/understanding-countries-net-zero-emissions-targets_8d25a20c-en">“Understanding countries’ net-zero emissions targets”</a>​ </blockquote>
<p><br/>The same report elaborates further: there is a difference between how net-zero CO2 emissions and net-zero GHG emissions are applied at global vs the regional, national and sub-national levels. For the latter, these terms generally apply to emissions and removals under the direct responsibility of the reporting entity. Carbon and climate neutrality, however, include emissions and removals within and beyond the direct responsibility of the reporting entity.</p>
<h1>What about removals?</h1>
<p>If we zoom into the “balancing” part of the net-zero goals, one would assume that when talking about net-zero (GHG) emission targets, we’d also be talking about GHG removal. In practice, carbon removal is used much more widely than GHG removal.</p>
<img src="https://illuminem.b-cdn.net/articlebody/ba0340de9c7a4408159a4c8e0c9f57ee039b34b9.png" alt="Figure 3: Difference between carbon dioxide removal and greenhouse gas removal">
<p>Greenhouse gas removal is a broader term compared to carbon removal. It covers the removal of all greenhouse gases, including CO2. Of all GHG removals, carbon removal (or its longer version Carbon Dioxide Removal, CDR) is the main type of GHG removal currently explored. This is due to the relative abundance of CO2, its long atmospheric lifetime, and its chemical reactivity which make CO2 an appealing candidate for removal. The IPCC focuses on carbon removal, and so does the majority of governmental policies and academic literature. But GHG removal is also used. One of the most well-known examples to the general public might be the UK’s plans for <a href="https://www.gov.uk/government/consultations/greenhouse-gas-removals-call-for-evidence">GHG removals</a>. The EU, in comparison, is preparing its <a href="https://evetamme.com/2021/12/15/shaping-europes-carbon-removal-policy/">Carbon Removal Certification</a>.</p>
<h1>Final thoughts</h1>
<p>The confusion around the terminology has decreased in the last few years. It’s less and less common to hear speeches by high-level officials that mix up CO2-only targets with climate neutrality targets. Nevertheless, it still remains important to pay attention to the types of net-zero targets and pathways when modelling (be it CO2-only or all GHGs). The question “Net-zero what?” helps to understand each other in climate discussions and compare apples with apples.</p>
<p><br/><em>This article is also published on the <a href="https://evetamme.com/2022/03/08/carbon-neutrality-to-climate-neutrality/">author&#x27;s blog</a>.</em> <em>Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.</em>​ </p>
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<h3>Footnote</h3>
<p>[1] there are <a href="https://www.nature.com/articles/d41586-021-00662-3">several other elements</a> that are equally important in net-zero targets.</p>


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Eve Tamme

Eve Tamme

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