The year 2025 started on a positive note for the carbon sequestration sector, as the long-awaited EU regulation on the certification framework for carbon farming and carbon storage products came into effect on December 26, 2024.
The regulation did not bring new cumbersome bureaucracy; instead, it largely follows existing practices of the voluntary carbon market, such as additionality, permanence and verifiability.
The main change brought by the regulation is that the previously good practices are now being formalized into law, bringing clarity to the carbon sequestration market. Both producers and customers benefit from clear and common rules that apply to all stakeholders.
What does the regulation cover?
The regulation that has come into force across the EU covers the following measures: Permanent carbon removal, carbon storage actions and carbon farming actions.
Permanent carbon removal refers to the capture and storage of biogenic carbon or atmospheric CO2 for several centuries. Such measures can include CO2 capture and storage in bioenergy production or direct CO2 capture and storage from the atmosphere.
Carbon storage actions, on the other hand, refer to actions where carbon is captured and stored for at least 35 years. Such projects can include wood-based building products.
The regulation also covers carbon farming actions that enhance carbon sequestration and storage in forests and soils, as well as reduce greenhouse gas emissions from soils for at least five years. Carbon farming measures can include activities such as reforestation, the restoration of peatlands or wetlands, and improving nutrient cycling.
Carboreal’s own afforestation activities fall under the category of carbon farming actions, although our goal is to sequester carbon for much longer than five years, i.e., for decades. The four certification criteria, which will be introduced soon, will not change our current operations, as we have been operating according to them since the company's inception.
The principle of the four certification criteria
According to the regulation, carbon removal actions must meet four general criteria in order to be certified:
The actions must generate a measurable net carbon removal benefit or a net reduction in soil emissions.
The actions must be additional, meaning they must exceed legal requirements at the individual actor level, and they need the incentive effect of certification to be financially viable. (Additionality)
The actions must aim to ensure long-term carbon storage and minimize the risk of carbon release. (Permanence)
The actions should not cause significant harm to the environment. Additionally, the actions should be capable of generating co-benefits for one or more sustainability goals. (Sustainability)
In addition to the above conditions, third-party independent certification bodies must verify the certifiable actions. (Verifiability)
Practical implementation of the regulation
Carbon market participants can demonstrate compliance with the regulation through certification systems. These systems will apply EU's reliable and transparent monitoring, verification and reporting rules, aiming to foster trust in the system and ensure the integrity of environmental goals.
The regulation will also introduce accountability mechanisms, allowing participants to address the potential release of captured carbon back into the atmosphere. After the regulation comes into effect, the European Commission will establish an electronic, EU-wide registry for carbon sequestration activities in four years.
With the registry, the Commission aims to ensure that the certified units granted for the net carbon removal benefits produced by certified carbon removal and soil emissions reduction actions are truly transparent and fully traceable.
An important regulation from the EU, Finland's own solutions remain uncertain
The regulation is a very welcome change for the voluntary carbon market. Responsible actors have already been operating in line with the spirit of the current regulation, but in the future, compliance with the regulation will be required from everyone, at least if they want to participate in the voluntary carbon market or sell carbon sinks.
However, for the regulation to work, actions and actors are needed to ensure that states provide sufficient resources to verify producers and methods. In this work, certifiers play a key role.
It is expected that, in Finland's case, the approval of verifiers and methods will fall under the responsibility of the Energy Authority. Unfortunately, this likely means that the implementation of the regulation will take time, especially considering the Energy Authority's statements about resource shortages in relation to the flexibility mechanism of the distribution obligation.
Despite the evidently difficult situation, we hope the Energy Authority will be given sufficient resources to handle the matter. Right now, swift action and investment in certifiers are needed from the Finnish government so that the regulation, along with its benefits, can be implemented on the ground as soon as possible.
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