Guest post by: Sebastien Cross, Co-founder and Chief Innovation Officer, BeZero Carbon
The adoption of the first voluntary certification methodologies under the Carbon Removal and Carbon Farming (CRCF) Regulation is a meaningful step forward for European climate policy. By setting out common standards, the EU is starting to build the infrastructure required for permanent carbon removals.
This progress matters for more than technical, methodological reasons. It reflects a growing recognition that carbon markets will play a central role in sustaining the political and economic feasibility of the EU’s net zero pathway. That role is not guaranteed. For carbon markets to support climate ambition, they must function effectively and retain public credibility.
In recent years, ambitious climate targets have come under growing political pressure, mainly due to rising costs. Carbon markets offer one potential route through this challenge, allowing emissions reductions and removals to be delivered more economically, while maintaining overall ambition. This includes both scaling removals within Europe and drawing on high-quality climate solutions internationally.
BeZero’s research, published last year, estimates that by 2040 the EU could be using around 380 million carbon credits per year. This would comprise around 120 million domestic removal credits generated under the CRCF, alongside approximately 140 million international credits through international emissions trading under Article 6, and a further 30 million credits purchased under the airline scheme CORSIA.
Our research found that integrating a broader and more cost-effective mix of credits, beyond expensive engineered solutions like Direct Air Capture to lower-cost but impactful options like reforestation, could reduce the cost of meeting the EU’s 2040 climate target by up to €37bn per year. This figure is hugely significant — it’s equivalent to around 20% of the EU’s annual budget. At a time of fiscal pressure and growing electoral resistance to climate policy, the so-called “greenlash”, cost-effectiveness is central to long-term political stability.
But short-term savings cannot come at the expense of long-term trust. The experience of the voluntary carbon market over the past few years has demonstrated how quickly confidence can be eroded when integrity is called into question. Once public trust in climate claims is lost, market recovery can take years. This is why the CRCF’s credibility must be prioritised from the outset.
Although the CRCF represents a strong foundation, it needs strengthening if it is going to actually work. Some methodologies accepted under the CRCF are highly dependent on what happens on a project level. For example, on biochar, only waste and residue biomass is allowed to be used for the primary product biochar. But the definition of what “waste” is, is notoriously difficult to pin down, and could change over time as new biomass markets emerge. Without robust safeguards at a project level, there is a genuine risk of methodologies over- or under-stating actual climate impact.
A further challenge is that the role of the CRCF within the wider EU climate framework remains ill-defined. It is not clear how CRCF-certified removals will contribute towards EU climate targets, which currently allow up to 5% to be met through carbon removals. Nor is there clarity on whether, or how, the CRCF might interact with the EU Emissions Trading System, or with international emissions trading under Article 6. These decisions need to be made quickly to provide sufficient clarity to investors to unlock the capital required to scale removal solutions.
Amidst these challenges, independent, risk-based carbon ratings will be essential to complement the regulation. Ratings provide a way to move beyond minimum eligibility criteria set out in the CRCF and assess whether credits from individual projects reflect real-world impact. In the voluntary market, the positive correlation that has emerged between ratings and prices has fundamentally shifted the economic incentives developers face, replacing the race to the bottom with a race to the top on environmental outcomes.
Despite the CRCF’s shortcomings, one broader truth is clear: EU leadership on net zero remains globally significant, particularly at a moment when other major economies are scaling back or delaying climate commitments. Europe is increasingly an outlier, pushing ahead with market-based approaches to decarbonisation while others hesitate or roll back.
Maintaining the political mandate for ongoing climate leadership will require European governments to show that climate policy can be delivered in a way that is both economically credible and consistent with broader priorities such as industrial competitiveness. A careful, evidence-led approach to the CRCF, which includes risk-based ratings, is an investment in the future credibility of carbon markets and the long-term viability of net zero itself.
