Fit for 2030 series: A Slow and Steady start for CDR in the EU

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Carbon Dioxide Removal (CDR) has recently emerged as an integral component of the EU’s climate neutrality goal. Within the European Climate Law, which sets this goal into EU law, the contribution of removals via the land sink are explicitly mentioned and kept separate from the need to reduce emissions in the run up to 2030.  

The Fit for 55 package seeks to implement and review legislation to meet the high-level targets agreed by the EU and its Member States, including a comprehensive rethink of the existing climate policy architecture. CDR features more prominently in this raft of legislative proposals than it has ever done so before, but much remains to be done.  

Land-based removals 

The cornerstone of the EU’s CDR approach so far relies primarily on land-based removals, regulated by the so-called LULUCF (land-use, land-use change and forestry) Regulation. The proposal to review the regulation anticipates a higher target for 310 million tons of net CO2e removals via the land sink up to 2030, along with a reshuffle which would include agricultural emissions, resulting in a new AFOLU (agriculture, forestry and other land use) regulation. The strategic aim would be for the AFOLU sector to reach net-zero emissions by 2035, thereafter squeezing out negative emissions for the rest of the economy.  

Currently, agriculture emissions are regulated under the Effort-Sharing Regulation (ESR) which sets national targets for each EU Member State to reduce those emissions which are not currently regulated by either the ETS or the LULUCF Regulation. By including agriculture into the LULUCF Regulation, agriculture would effectively get a ‘free pass’ to emit at least as much greenhouse gases as the EU land sink removes.  

This will mean that removals from the land sink will be earmarked specifically for that sector until 2036. Thereby preventing industrial and fossil emitters from relying on or claiming land-based removals to comply with emission reduction targets. In short, a cement plant or a fossil fuel refinery will not be able to claim carbon neutrality though the planting of trees. This element is a welcome step forward, but will require further scrutiny to ensure the agricultural is not left off the hook. 

Engineered removals 

As yet, there is no regulatory incentive or mechanism in the EU to encourage the deployment of engineered removals such as Bio-CCS or Direct Air Capture and Storage (DACS). The Fit-for-55 package does not appear to address this. 

No less, the proposed revision of the Renewable Energy Directive (RED) will rightly seek to phase-out support for facilities which supply electricity from forest biomass. This service can easily be provided through wind or solar electricity generation. Exclusions to the phase-out includes the first explicit measure to add CCS to biogenic point sources in the EU. While largely insufficient to encourage the deployment of CCS and Bio-CCS, it is welcome first step in acknowledging the need to capture and store biogenic CO2.  

At the moment, emitting biogenic CO2 is deemed as ‘carbon neutral’, a controversial and counterproductive policy decision which encourages a switch to biomass for combustion and fails to address the impact of releasing CO2 into the atmosphere, regardless of CO2 origin.  

Bellona’s preliminary conclusions 

Overall, CDR seems to have gotten off the right foot in EU climate policy, largely owing to the removal cap introduced in the European Climate Law. The fact that the contribution of land-based removals to the EU’s 2030 target is capped to 225MtCO2e means that one of the major risks of ‘mitigation deterrence’ has been avoided: industrial polluters will need to reduce emissions without having the option to purchase cheaper, often unreliable, forestry offsets.  

As was to be expected, no major announcements were made with regards to engineered removals. While some had called for these to be included in the ETS, the Commission has held true to its previous statements (and Bellona’s position).  

Overall, the Commission’s approach to CDR governance is off to an acceptable start. Land-based emissions and removals are isolated and no major ‘faux-pas’ has been made on engineered removals. That said, most of the important decisions are yet to come and how these will be made remains to be seen.