There is growing international recognition that meeting net zero by 2050 will first and foremost require dramatic changes to cut emissions, but also a significant amount of carbon removal.
Earlier this week, the world’s top climate scientists warned in the latest Intergovernmental Panel on Climate Change (IPCC) report that the remaining challenges are enormous, climate risks are far greater and immediate action is needed on all fronts. The United Nations Secretary-General António Guterres sounded the alarm over a “climate time bomb” and called on wealthy nations, including the European Union, to accelerate their efforts and bring forward their net-zero deadlines.
The IPCC report also reconfirmed that, in addition to deep emission reductions, we need effective ways to remove carbon from the atmosphere to reach our climate goals and reverse global warming in the future. Some of these carbon removal solutions rely on technologies that are still nascent today, and we need to do much more to scale them fast.
In Europe, we are starting from a position of strength. The region is home to some of the world’s most innovative nature- and technology-based carbon removal solutions. As a company, we have invested in several of these projects as part of our commitment to become carbon negative by 2030 and remove our historic emissions by 2050. From Carbofex’s biochar solution to carbon-packed concrete from neustark, and Climeworks’ direct air capture approach, there is an abundance of promise and potential. What matters now is scaling these solutions faster to help us tackle hard-to-abate emissions. While the global supply of carbon removal currently sits at approximately two megatons per year, we need much greater capacity to reach net-zero by 2050. Scientists project that market supply will have to increase 5,000 times to 10 gigatons per year to create meaningful change.
Bridging this gap calls for a systemic approach comprising technology, policy and large-scale investments to create a trusted and effective carbon removal market at the speed and scale the world needs. The proposed EU Carbon Removal Certification Framework (EU CRCF) is a unique chance to do so.
The proposed certification mechanism is the first of its kind. It has the potential to set high-quality criteria, create much needed standards for growing the carbon removal market and address many of the shortcomings that hamper its growth today. For that, the EU CRCF needs to sharpen the definition of carbon removals and clearly distinguish it from reductions. It needs to strengthen the criteria for high-quality removals (such as additionality, durability and leakage). It must help advance environmental justice as well as ensure a robust monitoring, reporting and verification system, aligned with existing methodologies.
Clearly differentiate carbon removals from reductions
Today, carbon removals are not clearly distinguished from credits that cover avoided or reduced emissions, which hampers the development and affordability of the carbon removal market. Without an agreed definition that differentiates between reductions and removals, we will not be able to drive the growth and pace we need to accelerate the EU’s net-zero transition.
Clearly distinguishing removal from avoidance credits will also be critical for our collective remediation of historic emissions. For instance, Microsoft has committed to remove from the environment all the carbon the company has emitted since it was founded in 1975. Only removal credits should count towards remediating historical emissions. With clear crediting for removals, companies can continue to focus on driving deep emissions reductions and separately purchase carbon removals to cover emissions from hard-to-abate sectors and historical emissions.
Carbon accounting is fundamental to understanding our impact and knowing what to fix as the market matures. Put simply, we cannot manage what we cannot measure. The proposed EU CRCF represents a promising step toward accurate accounting of the verified carbon removal units and sets a good basis for developing standards of accounting and transparency for certification schemes. We commend the fact that the regulation also proposes to establish and maintain interoperable public registries using automated systems that support transparency and the traceability of carbon removal certificates. It will also allow putting digital technology and AI to work to process large volumes of data from multiple sources for the benefit of carbon removal policies and markets.
Set high-quality standards for carbon removals
Growing the carbon removal market quickly can only happen if we build trust and confidence among its participants, including NGOs, corporate buyers, investors and policymakers. This will require greater clarity, consistency and transparency of carbon removal accounting principles and standards.
In the absence of common standards, we have developed our own criteria for high-quality carbon removals, and so have other corporate buyers. However, for a future market to function effectively, we urgently need common, scientifically sound and transparent standards for carbon removal, which is something the EU CRCF can help create.
One of those criteria is carbon additionality, meaning the carbon removal would not have happened without project financing from the sale of the removal credits. Today, there is no single, clear market standard for additionality, but the EU CRCF can create this clarity. The proposed regulation already includes strong tests in this regard, but these should be further strengthened by demonstrating that carbon removal credits are required to implement a project and that the supplier is not simply taking credit for an existing activity without the incentive of project financing. Strong criteria for carbon additionality will be crucial to build trust and integrity in the system overall.
Durability is another important criterion. It indicates how long carbon dioxide will be kept from the atmosphere. The EU CRCF has the potential to set more robust durability standards by strengthening the liability mechanisms for long-term storage and clarifying the distribution of liability among market players. Doing so could help boost the market for high-durability carbon removal solutions, like carbon mineralization and direct air capture that can sequester carbon dioxide for millennia, without foregoing efforts in support of nature-based solutions and conserving and restoring existing ecosystems.
Another high-quality criterion for carbon removal is leakage. It involves the risk of displacing activities that then cause the same emissions to occur elsewhere. For example, improved forest management might lead to carbon removal in one area by letting trees grow longer but may indirectly result in trees being cut elsewhere to satisfy timber market demands, thereby negating the removal. The inclusion of stronger leakage considerations, in particular related to nature-based credits where such risk is higher, would also further increase the quality and accuracy of the proposed certification system. The EU CRCF should help accurately assess leakage risks and ensure that appropriate carbon deductions are properly accounted for.
Include climate justice considerations and pursue co-benefits
At Microsoft, we prioritize projects that provide more than just carbon removal, such as advancing sustainable livelihoods and environmental justice, building climate resilience, supporting water conservation and waste reduction, and protecting ecosystems and biodiversity. We suggest enriching the list of sustainability objectives related to carbon removal activities in the EU CRCF with additional criteria that support forest preservation and are important for bioenergy with carbon capture and storage (BECCS) projects, as well as climate justice considerations. This would further create co-benefits, for example addressing local environmental justice priorities, communicating the benefits of carbon removal, including to farmers for whom soil carbon sequestration can lead to larger, more resilient yields, and supporting sustainability skills development within affected communities.
Robust monitoring, reporting and verification
For carbon removal certification to be credible and accurate, it must be governed by a robust monitoring, reporting and verification (MRV) system. The EU CRCF already encourages the use of technology and automated systems to support public registries for carbon removal certificates and monitor actual removal. To strengthen the integrity and credibility of the mechanisms further, certification schemes – just like certification bodies – should be independent from operators to avoid conflicts of interest.
For global alignment, the EU CRCF should follow existing global frameworks and established MRV practices such as the United Nations Framework Convention on Climate Change (UNFCCC), the Voluntary Carbon Markets Integrity Initiative (VCMI), the Greenhouse Gas Protocol (GHG Protocol), Integrity Council for the Voluntary Carbon Market (IC-VCM) and more. It should also align with carbon reporting standards being adopted by the European Commission as part of the Corporate Sustainability Reporting Directive (CSRD). This will not only promote trust and transparency within the EU carbon market but also reduce costs.
Ultimately, this first of its kind certification framework for carbon removals represents a major opportunity. It sets an important precedent for the rest of the world and shows that Europe continues to lead the way in setting climate policies that can help tackle this truly global challenge humanity is facing. Just as Europe has emerged as a leader in carbon removal technology, we are hopeful that this framework will serve as a North Star on the global carbon removals policy stage.
Read our full comments on the proposed EU Carbon Removal Certification Framework here.