EU eyes net-negative emissions with bloc-wide carbon removals framework
The EU foresees ramping up a long list of carbon removal strategies in its early vision of a Paris Agreement-aligned framework.
The European Commission aired plans for an EU regulatory framework to scale up markets for CO2 Removals (CDR) in a 15 December Communication on Sustainable Carbon Cycles, ahead of a formal proposal at the end of 2022.
Growing the use of CDR will be necessary for the EU to reach proposed Paris Agreement-aligned goals, which require the EU to store 300 million metric tons (mt) of CO2 by 2050 and "pave the way for a policy of negative emissions," according to the communication.
The proposals include both agricultural and industrial carbon removal solutions. Experts say they will initially benefit more mature Bioenergy with Carbon Capture and Storage (BECCS) before boosting emerging Direct Air Carbon Capture and Storage (DACCS).
Despite CDR offsets being traded on voluntary carbon markets, incentives are still too low and technology costs too high to reach economies of scale. While the US already incentivizes carbon capture and sequestration through a Section 45Q tax credit, the EU is aiming to start subsidizing a different set of sequestration tools past the research stage through Contracts-for-Difference-style subsidies, using revenues from the EU Emissions Trading System (ETS).
Other countries might need to follow suit. The latest Intergovernmental Panel on Climate Change (IPCC) report made it clear that negative emissions globally are critical to staying within 1.5 degrees Celsius of warming. However, the IPCC warned that CDR are "unproven."
Countering this issue, the EC wants a Carbon Removal Certification Mechanism in place by 2028 so that all accounting and verification can be put into practice through the trading of voluntary CDR credits by 2030. The learning period allows the EC to consider including CDR credits in the EU ETS in the future.
"This certification is very important for the trust towards voluntary [CDR offset] markets and then also towards the public and the equity markets [for CDR technologies] if they come … if you don't have certification, then you can't have a lot of income, so this will be important to get these first products off the ground," Chief Carbon Technology Strategist for investment company Carbon Direct Wilfried Maas told Net-Zero Business Daily.
CDR based on the use of forests, agricultural land or oceans—known as Nature-Based Solutions (NBS)—are yet to earn public trust. "The most important thing I think is the trust of society or the credibility this brings. Certification will be a very important element because there have been some very low-quality nature-based offsets traded internationally, which have been in the news, but there are elements of sufficient quality," said Maas.
More trust can ensure the CDR sector takes off. "Carbon removal is going to be really important for stabilizing the climate, in addition to cutting emissions rapidly across the board. Most ways of removing carbon from the air are at early stages and on a small scale, so it's great to see the European Commission start to work up plans to scale them up," Steve Smith, executive director of Oxford University's research hub focused on GHG removals, CO2RE, told Net-Zero Business Daily.
Industrial targets may include blue hydrogen
The EC's headline target under the communication is to permanently remove and store 5 million mt of CO2 by 2030.
Both Maas and Smith told Net-Zero Business Daily this target is too low. "It is worth noting that the UK alone has just set a target of 5 million mt removed using new technologies by 2030—equal in size to the proposed target for the whole EU. I think the commission could be more ambitious there," Smith said.
The EC aims to study the potential for cross-country and open-access CO2 carbon transport and storage infrastructure, as well as the development of CCUS hubs.
The plans also incorporate some industrial Carbon Capture and Utilization and Carbon Capture and Storage (CCS). To push the utilization of carbon by the chemicals sector, the communication targets sourcing at least 20% of the carbon used in chemical and plastic products from sustainable non-fossil-fuel sources by 2030. For example, Sustainable Aviation Fuel (SAF) producers could be obliged to use carbon through member state low-carbon fuel mandates.
The EC plans to differentiate between technologies that permanently remove CO2 and those that store it for shorter periods or without a net decrease of the CO2 to the atmosphere, although how it plans to do this is not yet clear.
For example, blue hydrogen might be used to remove carbon from steel production, according to Maas. But the CO2 transport infrastructure proposed is also a windfall for non-net-negative fossil fuel CCS, which is excluded from the framework, according to Maas.
Agricultural removals extremely "challenging"
The communication's agricultural CDR proposals support a different policy goal: a 2030 target to remove 310 million mt CO2 equivalent in the land sector laid out in a proposed revision of the Land Use Land Use Change and Forestry Regulation (LULUCF).
The so-called "carbon farming" proposal will also make its way into the EU's other proposed carbon neutrality policies, for example the Forest Strategy, as well as its Biodiversity Strategy and Long-Term Vision for Rural Areas.
Under it, the EU plans to pay landowners to sequester carbon. Funds might come by way of the EU's farm subsidy program, Common Agricultural Policy (CAP), and other EU programs such as LIFE and Horizon Europe's Soil Deal for Europe mission. "The CAP has for so long been a money pit to keep farmers in business. Using those subsidies to encourage land practices which soak up carbon is a welcome improvement," said Smith.
This may be why paper industry association CEPI was in favor of the agricultural CDR proposals, which it sees as a path to exploring new business models. Agreeing with this, both the European Biogas Association and the Italian Confederation of Farmers (Cia-Agricoltori Italiani) saw CDR as a new source of potential income for farmers.
But many green groups fear that the agricultural sector will not be able to keep track of the changing carbon storage status of their soil, avoid carbon leakage, or make the sustainable land-use changes that CDR will demand. They are particularly leery of including certain nature-based CDR in the EU ETS.
Norwegian non-profit Bellona is concerned that agricultural products would not be a permanent store of carbon and suggested "substantial clarification" to avoid an outcome that would "formalize greenwashing" for other carbon removal sectors.
A US-based nonprofit, the Institute for Agriculture and Trade Policy (IATP), Greenpeace, and others foresaw problems with agricultural CDR credibility. "At worst, [the carbon farming initiative] could lock Europe in the current intensive and extractive model of agriculture and land management and allow polluters an escape hatch from real emissions reductions," they said in a joint letter.
What's more, the EU plans foresee funding farmers that are responsible for creating emissions via livestock and biofuel production, they said, adding, "…the EU must steer clear of contradictory incentives: farmers and land managers cannot increase carbon sinks on one hand, and be asked to increase their production of crop-based biofuels that continue emitting GHGs, on the other hand."
The EC seems aware of "implementation challenges" such as a need for new land management practices, the absence of robust monitoring, reporting, and verification systems, the complexity of measuring carbon storage, and farmers' resulting uncertainty about funding. It said it is "crucial to ensure that credits … are coupled to a net long-term benefit in terms of GHG emission avoidance."
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