Offsets, Greenwashing Endanger EU Carbon Farming Plan

As the European Union moves to develop new carbon removal legislation, campaigners are warning against offsetting schemes and corporate greenwashing.

“There are strong indications that this particular piece of legislation will look into creating carbon credits, or offsetting emissions,” Jurij Krajcic, policy officer for the European Environmental Bureau (EEB), told a media briefing this week.

“Offsetting—that means creating carbon credits—and enabling companies or any entity to conceal or hide their emissions behind renewables,” he added. “And there are strong arguments to be very doubtful of this approach, as it risks not providing any benefits.”

Following recent analysis from the Intergovernmental Panel on Climate Change, the European Commission announced it would publish a legislative proposal to establish a Carbon Removal Certification Framework by the end of 2022. The EU is considering carbon farming as a climate mitigation option, defining it as “the management of land-based greenhouse gas fluxes, including carbon pools and flows in soils, materials, and vegetation, with the purpose of reducing emissions and increasing carbon removal and storage.”

The EEB has developed a set of policy recommendations to sidestep “the creeping industry greenwashing” that it says would severely undermine carbon removals certification (CRC). That could make the CRC framework an opportunity for the EU to lead by example on environmental and climate policy, says EEB, as long as new legislation aligns with existing climate targets and environmental regulations.

But it will be critical that the CRC framework reject offsetting schemes that are shown to create disincentives for actual emissions reductions, while misleading consumers and creating harmful liabilities for landowners, the EEB warns. First among its recommendations is an imperative to keep carbon removals and emissions reductions separate, meaning that “removal certificates must not be used for offsetting emissions by private or public entities.”

EEB adds that not all carbon farming practices should be included in the CRC because some practices—like sequestering organic soil carbon on farmland—are highly reversible. A CRC mechanism should also be centred on comprehensive ecosystem restoration instead of just carbon, which could create perverse incentives.

“Science has been very clear that increasing biodiversity and ecosystem integrity is a prerequisite for high quality removals, which increases resilience of our lands against natural disturbances,” said Krajcic. The focus should be on climate adaptation potential, he said, “as opposed to having a sole focus on creating carbon credits.”

EEB also recommends the Commission exclude voluntary carbon markets from its CRC, since most voluntary markets have uncertain additionality requirements and offer low prices to landowners. The new legislation should also ensure full transparency and include long-term, robust monitoring requirements.

And critically, CRC policies should be drafted to prevent false carbon-neutrality claims and greenwashing that are already spawning from offsetting and voluntary carbon markets, the EEB asserts.

“Offsetting deters efforts to reduce emissions by simply concealing them behind removals,” Krajcic said. “It distracts us from real climate action and real problems… and it leads to widespread greenwashing—especially false carbon-neutrality claims and corporate climate pledges—whereby no actual emission reductions have actually been achieved.”

To fund a CRC, EEB calls on EU member states to use public financing from sources like the Common Agricultural Policy, which already has funding for climate mitigation. There could also be potential to use the EU Emissions Trading System’s innovations fund. EU states may also have to contribute national financing, the EEB told the media briefing, citing existing national climate funds in Denmark and the Netherlands as examples.