EU mulls adding removal credits to carbon market

The European Union (EU) is contemplating the inclusion of emissions removal credits into its carbon market, Reuters reported on Wednesday. 

This move could potentially reopen the market to carbon credits in the coming years, according to Ruben Vermeeren, deputy head of the European Commission’s EU carbon market unit. 

The EU’s carbon market, which mandates power plants and factories to purchase a permit for each ton of carbon dioxide they emit, is the bloc’s primary policy for curbing greenhouse gas emissions.

Vermeeren revealed that the Commission is currently assessing the feasibility of integrating carbon removal credits into the scheme and has until 2026 to propose rules for their inclusion. These credits, which can be generated by projects such as planting CO2-absorbing forests or developing CO2 extraction technologies, represent the removal of carbon emissions.

While many companies voluntarily “offset” their emissions by purchasing carbon credits, the EU has banned international carbon offsets from its emissions market since 2020 due to concerns about low environmental standards.

Despite this, Vermeeren suggested that the integration of removal credits could provide industries with a means to address residual emissions. However, he cautioned that promoting offsets could discourage companies from reducing their emissions, emphasising that “offsets cannot replace mitigation.”