Changes from plenary report to adopted text

Recital 31: (31) The objectives of this Regulation, namely to promote the deployment of high quality carbon removals and carbon farming while minimising the risk of greenwashing, cannot be sufficiently achieved by the Member States alone, and by reason of the scale and effects of the proposed action, those objectives can be better achieved at Union level. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives,

Article 1 – paragraph 1 – introductory part: 1. The objective of this Regulation is to facilitate and encourage the deployment and enhancement of carbon removals, carbon farming and carbon storage in products by operators or groups of operators as a complement to the irreversible and gradual reduction of anthropogenic greenhouse gas emissions across all sectors to meet the objectives and targets laid down in Regulation (EU) 2021/1119 and the goals of the Paris Agreement. To that end, this Regulation establishes a voluntary Union framework for the certification of carbon removals, carbon farming and carbon storage in products by laying down:

Article 1 – paragraph 1 – point a: (a) quality criteria for activities that take place in the Union;

Article 1 – paragraph 1 – point b: (b) rules for the verification and certification of activities;

Article 2 – paragraph 1 – point a a (new): (aa) ‘carbon farming emission reduction’ means an activity consisting of one or more carbon farming practices or processes carried out by an operator that results in the reduction of carbon release from a biogenic carbon pool, the reduction of nitrous oxide release from agriculture soils or manure management, or the reduction of methane release from enteric fermentation or manure management to the atmosphere through a carbon farming activity;

Article 2 – paragraph 1 – point b: deleted

Article 2 – paragraph 1 – point c: (c) ‘biogenic carbon pool’ means living biomass, litter, dead wood, dead organic matter, mineral soils and organic soils as set out in points (a) to (f) of Part B of Annex I to Regulation 2018/841;

Article 2 – paragraph 1 – point d: (d) ‘operator’ means any legal or natural person who operates or controls a an activity, including public entities and public authorities, or to whom decisive economic power over the technical functioning of the activity has been delegated; in the case of a carbon farming activity, an operator is a farmer as defined in Article 3(1) of Regulation (EU) 2021/2115 or a forest owner or manager as defined by national law, or a public entity or public authority;

Article 2 – paragraph 1 – point e: (e) ‘group of operators’ means a legal entity that represents more than one operator and is responsible for ensuring that those operators comply with this Regulation; in the case of a carbon farming activity, ‘group of operators’ means a cooperative or a legal entity that represents more than one farmer, forest owner or manager, or public entities or public authorities, or producer organisations or producer groups;

Article 2 – paragraph 1 – point f: (f) ‘monitoring period’ means a period, the duration of which is determined for each type of activity in accordance with Article 6, over which the storage of carbon is monitored by the operator or group of operators and during which the operator remains liable;

Article 2 – paragraph 1 – point g: (g) ‘permanent carbon storage’ means an activity consisting of one or more practices or processes carried out by an operator that, under normal circumstances and using appropriate management practices, stores atmospheric or biogenic carbon for several centuries through geological storage of CO2 or permanently bound carbon mineralisation;

Article 2 – paragraph 1 – point h: (h) ‘carbon farming’ means an activity related to land management, coastal management or animal husbandry, that results in carbon farming sequestration or carbon farming emission reductions for a period of at least five years;

Article 2 – paragraph 1 – point i: (i) ‘carbon storage in products’ means an activity consisting of one or more practices or processes carried out by an operator which ensures long-term storage of atmospheric and biogenic carbon in long-lasting harvested wood products or materials for construction for at least five decades in a manner consistent with other Union environmental objectives, as well as Regulation (EU) 2018/841 and IPCC Guidelines as adopted by the Conference of the Parties to the UNFCCC or the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement;

Article 2 – paragraph 1 – point i a (new): (ia) ‘geological storage of CO2’ means geological storage of CO2 as defined in Article 3(1) of Directive 2009/31/EC;

Article 2 – paragraph 1 – point n: (n) ‘certificate’ means a conformity statement issued by the certification body certifying that the activity complies with this Regulation;

Article 2 – paragraph 1 – point o: (o) ‘carbon removal unit’ means one tonne of certified net carbon removal benefit generated by carbon removals and registered by a certification scheme.

Article 2 – paragraph 1 – point o a (new): (oa) ‘reversal’ means the voluntary or involuntary release of carbon back into the atmosphere; in the case of geological storage of CO2, ‘reversal’ has the same meaning as leakage as defined in Article 3(5) of Directive 2009/31/EC or during CO2 transportation;

Article 2 – paragraph 1 – point o b (new): (ob) ‘carbon farming sequestration unit’ means one tonne of certified net carbon farming sequestration benefit generated by carbon farming sequestration;

Article 2 – paragraph 1 – point o c (new): (oc) ‘carbon storage product unit’ means one tonne of certified net carbon product sequestration benefit generated by carbon storage in products and registered by a certification scheme;

Article 2 – paragraph 1 – point o d (new): (od) ‘carbon farming emission reduction unit’ means one tonne of certified net carbon farming carbon reduction, net carbon farming nitrogen reduction or net carbon farming methane reduction benefit generated by carbon farming emission reduction and registered by a certification scheme, and separated and identified either as a ‘carbon farming emission reduction unit - carbon’, ‘carbon farming emission reduction unit - nitrogen’, or ‘carbon farming emission reduction unit - methane’;

Article 3 – paragraph 1 – introductory part: Carbon removals, carbon farming or carbon storage in products shall be eligible for certification under this Regulation where they meet both of the following conditions:

Article 3 – paragraph 1 – point a: (a) they comply with the quality criteria set out in Articles 4 to 7;

Article 3 – paragraph 1 – point a a (new): (aa) they comply with the rules on use of units set out in Article 3a;

Article 3 a (new): Article 3a / Rules on the issuance and use of units / 1. Carbon farming sequestration and emission reduction units shall be issued by 31 December each year, provided that an annual monitoring check does not show any non-compliance with the requirements set out in this Regulation and does not show a reversal. The certification body shall be responsible for the annual monitoring check based on reliable real-world data, which may be provided by a legal person or relevant authority, such as the paying agency, with the aid of the identification system for agricultural parcels provided for in Article 68 of Regulation (EU) 2021/2116. The annual monitoring check shall be performed by 15 October each year. The certification body shall transmit data on any non-compliance or reversal to the certification scheme within one month of the monitoring check. / 2. Any use of units shall ensure the highest integrity of climate mitigation and shall lead to an overall lower concentration of greenhouse gas emissions in the atmosphere. All removals, sequestration and emission reductions generated under this Regulation shall contribute to achieving the Union’s nationally determined contributions (NDCs) and climate targets and objectives as set out in Regulation (EU) 2021/1119 and shall not contribute to a third country’s NDC. / 3. A certified unit shall not be used or claimed by more than one legal or natural person at any point in time, and shall not be counted towards more than one Member State’s …

Article 4 – paragraph 1 – subparagraph 1: Net carbon removal benefit = CRbaseline – CRtotal – GHGassociated > 0

Article 4 – paragraph 1 – subparagraph 2 – point c: (c) GHGassociated is the increase in direct and indirect greenhouse gas emissions, over the entire life cycle of the activity which are due to the implementation of the carbon removal activity, calculated in accordance with protocols set forth in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. This includes, among others, emissions due to energy use, transportation, material inputs, displacement effects due to competing demand for energy or waste heat, and direct and indirect land use change, and covers both impacts within and outside the Union. The certification of a carbon removal activity based on the storage of CO2 from sustainable biomass shall not lead to an increase of the capacity of the plant beyond what is necessary for the carbon capture and storage.

Article 4 – paragraph 2a: 2a. A carbon storage in products activity shall provide a net carbon storage in products benefit, which shall be quantified using the formula: / Net carbon product sequestration benefit = CPSbaseline – CPStotal – GHGassociated > 0 / (a) CPSbaseline is the carbon sequestered in a product under the baseline; / (b) CPStotal is the total carbon sequestered in the product of the activity; / (c) GHGassociated is the increase in direct and indirect greenhouse gas emissions, over the entire life cycle of the activity which are due to the implementation of the carbon removal activity. This includes, among others, emissions due to energy use, transportation, material inputs, displacement effects due to competing demand for energy or waste heat, and direct and indirect land use change, and covers both impacts within and outside the Union.

Article 4 – paragraph 3: 3. Quantities referred to in paragraph 1 points (a), (b) and (c), in paragraph 2, points (a), (b), (c), (d), (e), (f) and (g), and in paragraph 2a, points (a), (b) and (c), shall be designated with a negative sign (-) if they are net greenhouse gas removals or, in the case of carbon farming emission reductions, net greenhouse gas reductions, and with a positive sign (+) if they are net greenhouse gas emissions, they shall be expressed in tonnes of carbon dioxide equivalent.

Article 4 – paragraph 4: 4. Carbon removals, carbon farming and carbon storage in products shall be quantified in a relevant, accurate, complete, consistent, comparable and transparent manner. Uncertainties in the quantification of carbon removals shall be duly reported and accounted as part of the certification methodologies, in a manner that is conservative, proportionate to the level of uncertainty, and in accordance with recognised statistical approaches and the latest available scientific evidence.

Article 4 – paragraph 5: 5. In the case of carbon removals or carbon storage in products, the standardised baseline shall be representative of the state-of-the-art performance of common current practices of comparable activities in similar social, economic, environmental and technological circumstances and take into account the geographical context.

Article 4 – paragraph 5 a: 5a. In the case of carbon farming, the standardised baseline shall be representative of the performance of common current practices of comparable activities in similar social, economic, environmental and technological circumstances and take into account the geographical context. In the case of carbon farming sequestration, the calculation of the standardised baseline shall not take into account those common current practices of comparable carbon farming sequestration activities that result in net greenhouse gas emissions. In the case of carbon farming emission reduction, the calculation of the standardised baseline shall not take into account those common current practices of comparable carbon farming emission reduction activities that result in increased net greenhouse gas emissions. The respective methodologies shall differentiate between static or dynamic baselines where necessary.

Article 4 – paragraph 6: 6. By way of derogation from paragraph 5, where duly justified in the applicable certification methodology by the absence of sufficient comparable activities to be able to set a representative baseline, the baseline may be based on the individual performance of that activity at the start of that activity.

Article 4 – paragraph 7: 7. The baseline shall be regularly reviewed and updated by the Commission at least every five years. The baseline shall remain constant for the operator throughout the monitoring period once an activity has started, but shall be reviewed and updated upon re-certification.

Article 4 – paragraph 8: deleted

Article 4 – paragraph 9: 9. To support the quantification of carbon farming, the operator or group of operators shall gather data on carbon sequestration and greenhouse gas emissions based on the use of Tier 3 methodologies in accordance with the 2006 IPCC guidelines for National Greenhouse Gas inventories, and in a manner compatible with national greenhouse gas inventories under Regulation (EU) 2018/841 and Part 3 of Annex V to Regulation (EU) 2018/1999, taking into account the objective of minimising the administrative burden for small-scale operators in accordance with Article 8(3) of this Regulation.

Article 5 – paragraph 1 – introductory part: 1. Each activity shall be additional. To that end, the activity shall meet both of the following criteria:

Article 5 – paragraph 1 – point a: (a) it goes beyond Union and national statutory requirements at the level of the individual operator;

Article 5 – paragraph 1 – point b: (b) the incentive effect of the certification is needed for the activity to become financially attractive.

Article 5 – paragraph 2: (2) Where the baseline is established pursuant to Article 4(5) or (5a), additionality as referred to in paragraph 1, point (a) is considered to be complied with. Where the baseline is established pursuant to Article 4(6), additionality as referred to in paragraph 1, points (a) and (b), shall be demonstrated through specific tests set out as part of the certification methodologies referred to in Article 8.

Article 6 – title: Storage duration, monitoring and liability requirements

Article 6 – paragraph 1: 1. An operator or group of operators shall ensure and demonstrate that a carbon removal activity results in the permanent storage of carbon.

Article 6 – paragraph 1 a (new): 1a. An operator or group of operators shall ensure and demonstrate that a carbon farming activity results in the long-term sequestration of carbon, the reduction of greenhouse gas emissions, or both.

Article 6 – paragraph 1 b (new): 1b. An operator or group of operators shall ensure and demonstrate that a carbon storage in products activity results in the long-term storage of carbon.

Article 6 – paragraph 2: 2. For the purposes of paragraphs 1, 1a and 1b, an operator or group of operators shall comply with the following criteria set out in paragraphs 2a to 2e. / (deleted) / (deleted)

Article 6 – paragraph 2 a (new): 2a. An operator or group of operators shall monitor and mitigate any risk of a release of the stored carbon occurring during the monitoring period, which shall be set as follows: / (a) for carbon removal activities, the monitoring period and requirements shall be consistent with Articles 13, 17 and 18 of Directive 2009/31/EC; / (b) for carbon farming activities, the monitoring period and requirements shall cover at least the entire period during which the results of the activity are projected to be sustained as set out in the applicable certification methodology; / (c) for carbon storage in products activities, the monitoring period shall cover the entire lifetime of the product until and including the end of life of the product.

Article 6 – paragraph 2 b (new): 2b. A carbon farming operator or group of operators may designate a legal person or relevant authority, such as the paying agency within the meaning of Article 9 of Regulation (EU) 2021/2116 in the case of carbon farming activities registered in the identification system for agricultural parcels, to be responsible for the monitoring, subject to all requirements under this Regulation being met.

Article 6 – paragraph 2 c (new): 2c. An operator or group of operators shall be subject to appropriate liability mechanisms, and designate a liable natural or legal person to be responsible for addressing any reversal, including due to force majeure, at any point in time during the activity: / (a) for carbon removal activities, the liability mechanism shall be consistent with the liability mechanism set out in Directive 2009/31/EC; / (b) for carbon farming activities, the liability mechanism shall be set out and approved as part of the applicable certification methodology and ensure that equivalent carbon sequestration is generated as compensation for the reversal; / (c) for carbon storage in products activities, the liability mechanism shall be set out and approved as part of the applicable certification methodology and ensure that equivalent carbon storage is generated as compensation for the reversal. / The certification scheme shall continuously monitor and ensure the availability and readiness of the liability mechanism throughout the monitoring period of an activity.

Article 6 – paragraph 2 d (new): 2d. In case of a reversal, the corresponding units shall be suspended in the certification registry where they are registered until the reversal has been addressed by the liability mechanism in accordance with paragraph 2c. / Where a reversal is not addressed within a reasonable timeframe through the liability mechanism in accordance with paragraph 2c, the validity of a certificate shall expire and the corresponding units shall be cancelled in the certification registry where they are registered.

Article 6 – paragraph 2 e (new): 2e. Where the validity of a certificate has expired in accordance with paragraph 2a, point (c), the operator or group of operators shall pay a corrective penalty reflecting the carbon cost of the amount of carbon released to the atmosphere. The Commission is empowered to adopt delegated acts in accordance with Article 16 to supplement this Regulation by establishing the formula for the calculation of the penalties and the arrangements for the payment of the penalties.

Article 6 – paragraph 3: 3. For carbon farming and carbon storage in products, the net benefit generated by the activity during the entire lifetime of the activity shall be considered released to the atmosphere at the end of the monitoring period or, in the event that the monitoring has been discontinued, before the end of the monitoring period, and the corresponding units shall be cancelled in the certification registry where they are registered, unless the operator or the group of operators carry out a re-certification of the activity and demonstrate the continuation of the activity and monitoring period. However, a carbon farming activity shall not lead to a decreased carbon sink, as defined in Regulation (EU) 2018/841, compared to the baseline beyond the monitoring period.

Article 7 – paragraph 1: 1. A carbon removal activity shall at least have a neutral impact on each of, and may generate co-benefits for one or more of, the following sustainability objectives: / (a) climate change mitigation beyond the net benefit referred to in Article 4(1); / (aa) the avoidance of the risk of carbon leakage in third countries; / (d) transition to a circular economy, including the efficient use of sustainably sourced bio-based materials;

Article 7 – paragraph 1a (new): 1a. A carbon farming activity shall at least generate co-benefits for the sustainability objective referred to in point (f) of this paragraph, and shall at least have a neutral impact on each of the sustainability objectives listed in points (a) to (ea) or may generate co-benefits for one or more of the sustainability objectives listed in points (a) to (ea) as follows: / (a) climate change mitigation beyond the net carbon farming benefit referred to in Article 4(1a); / (b) climate change adaptation; / (c) sustainable use and protection or improvement of water quality and marine resources; / (d) transition to a circular economy, including the efficient use of sustainably sourced bio-based materials; / (e) pollution prevention and control; / (ea) prevention of soil degradation, soil restoration, improvement of soil fertility and of nutrient management and soil biota; / (f) protection and restoration of biodiversity and ecosystems.

Article 7 – paragraph 1b (new): 1b. A carbon storage in product activity shall at least have a neutral impact on each of, and shall generate co-benefits for at least one of, the following sustainability objectives: / (a) climate change mitigation beyond the net carbon farming benefit referred to in Article 4(1a); / (b) climate change adaptation; / (c) sustainable use and protection or improvement of water quality and marine resources; / (d) transition to a circular economy, including the efficient use of sustainably sourced bio-based materials; / (e) pollution prevention and control; / (ea) prevention of soil degradation, soil restoration, improvement of soil fertility and of nutrient management and soil biota; / (f) protection and restoration of biodiversity and ecosystems.

Article 7 – paragraph 1 c (new): 1c. Carbon farming activities shall not negatively affect the Union’s food security and shall not lead to land grabbing or land speculation. They shall respect the rights of local communities and indigenous people affected by those activities, both within and outside the Union, as well as the balance between the environmental, economic and social impact on local communities and small-scale land managers. / An activity under the scope of this Regulation shall not negatively affect other activities under the scope of this Regulation.