An event presented to EU policymakers as presenting stakeholders perspectives on carbon farming credits was instead an industry sales pitch for offsetting. CMW’s Marlène Ramón Hernández gives us the inside scoop
The professional service multinational Deloitte recently organised a workshop for the European Commission, which was billed as offering perspectives on financing large-scale deployment of carbon farming units issued under the Carbon Removal and Carbon Farming Regulation (CRCF).
The event was a showcase to the EU executive on how it might incentivise uptake for CRCF carbon farming units and establish potential use cases for such units. Deloitte had previously prepared a background paper outlining policy options for financial incentives for carbon farming and is now preparing its final report, which will incorporate the feedback gathered from this meeting and provide recommendations.
However, while the workshop could have presented a useful opportunity for various stakeholders to gather and exchange ideas on a relatively new topic, what transpired was an event moderated entirely by Deloitte that platformed industry to speak unchallenged about using temporary and vulnerable units for offsetting.
A closed discussion
Panellists overwhelmingly represented the corporate sector, allowing voices with vested economic interests to dominate the discussion. Chief among them was Equinor, a fossil fuel company prone to numerous greenwashing scandals (they featured on a panel but were not listed on the agenda).
In a well choreographed presentation, there was a lack of time for audience participation. Despite this ‘workshop’ promising space for discussion, attendees were hardly given the floor, but were instead directed to answer closed questions via the menti application.
As such, speakers delivered prepared answers to questions asked by the chair, but received no follow-up or challenge to biased and polluter-centred perspectives on what particular financial incentives should be considered and how CRCF credits should be used.
The background paper provided to the audience also promoted factually incorrect information. Switzerland’s KliK Foundation, established under the Swiss CO₂ Act, is mentioned as an example for encouraging private investment in carbon farming projects. Yet, biological CO2 sequestration projects are not eligible under the Law. It is also claimed that the Foundation provides upfront costs, yet funding is only results-based, once ITMOs have been delivered. The paper also mentions the Ghana cookstoves initiative, yet conveniently excludes the known lack of transparency and well-documented overestimations surrounding this project.
Wishful thinking
Both the paper and the event placed absolute faith in the CRCF’s ability to issue high-quality credits.
Currently, the CRCF methodologies are being developed. These set technical rules governing each of the carbon removal and carbon farming activities envisaged under the scheme. This includes criteria on quantification of climate impacts (against a baseline), the additionality of the activity, its long-term storage and liability for early release into the atmosphere, and sustainability.
Yet, the provisions under the three draft CRCF methodologies that classify as carbon farming activities (peatland rewetting and restoration, agriculture and agroforestry on mineral soils, and tree planting) are far from robust.
To illustrate, the draft methodologies allow ample flexibility when quantifying carbon: specific models are not prescribed, baselines are at times set to zero and do not always require updating, ground measurements are hardly necessary, and sampling approaches are not robust.
Even more troubling, numerous derogations have been built into additionality provisions, creating a real risk that projects will be certified and issue units (likely for offsetting) despite not requiring CRCF revenues to go ahead. Yet, private climate finance should go to mitigation projects that truly need the funds, rather than reward business as usual.
These numerous simplifications are intended to ease the administrative burden for future operators: a bid echoed by the background paper and several panellists. Unfortunately, this means undermining the actual climate benefit and, just as importantly, the need to improve biodiversity.
A serious commitment to biodiversity?
Both the participants and the paper stressed the importance of biodiversity.
According to what is written on the paper’s seventh page, these are valued “over and above the carbon benefits provided by these projects”. Yet, under the CRCF, to abide by “the protection and restoration of biodiversity and ecosystems, including soil health as well as avoidance of land degradation (article 7(f))”, also known as the mandatory co-benefits criterion, operators do not need to quantify or even monitor biodiversity benefits.
Instead, the methodologies opt for an overly simplistic, qualitative approach, assuming that the implementation of a particular practice will automatically lead to biodiversity gains, regardless of local conditions or project-specifics. This assumption is exacerbated by the fact that operators may simply attest to peer-reviewed scientific literature indicating that a broad practice is, generally, beneficial for biodiversity protection or restoration.
Given the importance buyers place on biodiversity, either they are not aware of how compliance with biodiversity is currently envisaged by the draft methodologies, or they only care about satisfying the minimum demands required to achieve the biodiversity label, regardless of its actual robustness.
Offsetting is not the way
All in all, the workshop’s message was clear: CRCF carbon farming units can be used for offsetting compensation claims, either within or outside of the value chain. Yet, the unbalanced presentation ignores that such schemes offer fertile ground for greenwashing, can lead to social and environmental abuses, and distract from real emission reductions.
They also create a fictitious depiction whereby temporary and vulnerable carbon sequestration or emission reduction units are equated to permanent emissions. Yet both the CRCF soil emission reductions and soil carbon sequestration activities cannot be considered permanent due to the risk that unintentional or intentional changes arise, such as wildfires or re-draining of peatlands after the final credit has been issued.
Similarly, even if the CRCF were to create emission reduction units that directly mirror agri-food companies’ scope 3 emissions – that is, the indirect emissions that occur in a company’s value chain, but are not directly owned or controlled by the company itself – equivalence would still be hard to establish, given the potentially poor quality of the CRCF credit, the difficulties in establishing a direct supply chain, and accounting uncertainties.
And even if that unit were to adequately represent value chain climate action – it must not be used to compensate for other emissions – even if they are in that same value chain.
These considerations make our message quite clear: polluters need to reduce their emissions instead of constantly trying to find ways to offset or inset their damage and continue with business as usual.
There is no guarantee that the CRCF will deliver trustworthy carbon credits or guarantee biodiversity improvements, and they should certainly not be used to avoid implementing real, structural changes to our modes of food production. Hopefully, workshops in the near future will welcome a full set of perspectives, allow stakeholders from all corners of society to present their views, and ensure it is not only those with the largest lobbying budget shaping and influencing crucial policy discussions.
