The European Union ("EU") is coming closer to adopting mandatory rules for companies that use carbon credits.

• First, the European Parliament and Council are considering for adoption a Commission for a Regulation on a Carbon Removal Certification Framework ("CRCF Regulation Proposal").

• Second, the European Commission ("Commission") is in the process of adopting standards  (the so-called "ESRS") for the EU's mandatory ESG reporting regime—the Corporate Sustainability Reporting Directive ("CSRD")—that will also cover disclosures on companies' use of carbon credits (including as emission offsets) and their quality.

These two regulatory initiatives are closely tied to each other.  In effect, the draft ESRS that the Commission is considering for adoption require subject entities to disclose GHG removals and GHG mitigation projects financed through carbon credits.

The EU's aim of regulating carbon credits coincides with its push for carbon neutrality by 2050, and a related significant proliferation of companies publicly committing to achieve "net-zero" emissions by mid-century, which has triggered an uptick in strategic purchases of carbon credits in the voluntary carbon market ("VCM").The CRCF Regulation Proposal and the upcoming ESRS will help to expand sustainable and verified carbon removals and encourage investment in technological innovation.   

Companies turning to the VCM to reach their net zero goals, and others active in the generation, trading, and use of carbon credits, will want to follow these initiatives closely.  Opportunities remain for companies to express views that may shape the final contours of these regulations.

We discuss these developments and opportunities for public comment below. 

Regulation for a Carbon Removal Certification Framework

The European Parliament and Council are  currently considering for adoption the CRCF Regulation Proposal that the Commission presented in late November 2022.建议书载有规则监测、报告并验证欧盟/EEA内部发生的碳清除的真实性实际中,拟议方案仅用于EU/EEA中的碳清除。

/p具体地说,为了确保认证过程的透明度和可靠性,CRCF监管建议:
>
• 设置量化、额外性和长期存储需求,产品必须符合这些需求才能认证;
• 要求认证方法符合这些需求并授权委员会制定方法学and
• requires companies to subject their certification to independent third-party verification through a certification scheme. 

Thus, the CRCF Regulation Proposal would require carbon credit project developers and potential users to conduct their own assessment of the carbon removal in accordance with the "QU.A.L.ITY" principles and the methodologies prepared by the Commission and then submit that assessment for independent verification through a certification scheme. 

The CRCF Regulation Proposal requires certification schemes to be recognized by the Commission.  All service providers of certification schemes must submit annual records of their activities to the Commission, and communicate any attempted fraud they identify.  Moreover, certification schemes may only use accredited third-party certification bodies to verify project developers' and users' carbon removal assessments.  These certification bodies may only be accredited by national accreditation bodies in the EU Member States.  Hence, the CRCF Regulation Proposal creates a system of accreditation similar to that of notified bodies under the EU product rules. 

At this stage, it is not yet clear how carbon offsets created through carbon removal projects applying the methodologies and certificate schemes set forth under the CRCF Regulation Proposal may serve as an alternative mechanism to meet the EU's  GHG emissions reduction targets.根据欧盟委员会对CRCF监管建议的解释性备忘录,部分欧盟排放交易系统(EU-ETS)收入指向创新基金,它帮助企业投资创新清洁技术 — — 包括碳清除 。 CRCF监管建议与推向创新建议相匹配。 然而,看来CRCF监管建议下的碳清除不易交易或服务于EU-ETS下的目的。

此外,欧盟碳清除监管努力显然与全球开发相关联。值得一提的是,2023年1月会议中,国际可持续性标准委员会确认,拟议的s/www.ifrs.org/content/dam/ifrs/meetings/2023/jansb/sb/ap4-climateISSB是国际财务报告标准基金会(IFRS)二大标准设置板之一,并负责开发IFRS可持续性披露标准草案S2要求公司披露实现公司净零目标所必要的碳抵消数,包括用户理解实体拟使用抵消的可靠性和完整性所需某些因素A carbon removal activity's compliance with the CRCF Regulation Proposal (once adopted) would likely be an important marker of credibility and integrity. 

Interaction with the EU's Mandatory Carbon Credit Reporting Regime for Companies under CSRD

The draft ESRS standards that that the Commission is currently considering also include ESRS E1 on Climate Change ("ESRS E1"), which proposes a set of mandatory climate disclosures for many companies.  The ESRS E1 contains two principal disclosure requirements for companies with respect to their GHG removals and GHG mitigation projects that are financed through carbon credits:

• First, companies must disclose GHG removals and storage from their own operations and their upstream and downstream value chain, and report the underlying calculation assumptions and methodologies!and
• Second, and most important for carbon credits and the VCM, companies must disclose the amount of GHG emission reductions or removals (in metric tonnes of CO2eq) from climate change mitigation projects that financed through any purchase of carbon credits.

In addition, the ESRS E1 also requires that:

• Companies relying on carbon credits for achieving any net-zero targets explain the credibility and integrity of the carbon credits used, and whether and how its claims of GHG neutrality neither impede nor reduce the achievement of its GHG emission reduction targets;
• Companies consider recognized quality standards for preparing information on carbon credits, verifiable by independent third parties, to make public reports, and to provide rules for calculation, monitoring, and verification of the project's GHG emissions;
• Companies disclose information on carbon credits with a breakdown of the following items (see AG 66 for the tabular format in which companies are suggested to present information on carbon credits):
• the share (percentage volume) of reduction projects and removal projects;
  • the share (percentage volume) of each recognized quality standard;
  • the share (percentage volume) issued from projects in the EU!
  • • >
    • 和
  • >/carbon清除不影响温室气体排减量努力(ESRSE1建议约90-95%温室气体排减量应来自公司自身的企业排减量)。

  The draft ESRS E-1 does not reference the CRCF Regulation Proposal, but it requires companies to "apply consensus methods on accounting for GHG removals as soon as they are available."  This fits with the Commission's purpose for the regulation of the certification of carbon removals—namely to increase transparency, credibility, and integrity around companies' actions to permanently remove GHG from the atmosphere.

  Next Steps

  The Commission is set to adopt the draft ESRS as delegated acts by mid-2023.  On November 23, 2022, EFRAG sent its draft ESRS to the Commission.  Once adopted, the European Parliament and Council have two months to present any objections.之后ESRS将成为强制标准,公司必须报告各种ESG影响(见即使在此后,欧盟认证框架也只有在欧盟委员会通过首个认证方法并承认首个认证机制后才能完全运行 。

  委员会拟议的CRCF监管建议草案目前开放公共咨询 2023 //www.ludikid.com/2023/01/upcoming-eu-rules-on-green-claims/ Rosa Oyarzabal、Lucas Falco、Candido García Molyneux、Yuliya Gevrenova和Bart Van Vooren Tue2023年1月24日02:29:26+00 ESG系统 欧洲能源和气候政策 广告保护 绿清洗 净零 可持续性 //www.ludikid.com/?p=8415 p对齐='Center'###/p>欧盟委员会预期在未来数月内提交绿申请指令建议(“绿申请指令建议”)或'建议'。连同建议指令授权消费者通过更好的保护避免不公平做法和更好的信息实现绿色过渡Continue Reading…

  The European Commission is expected to present a Proposal for a Directive on Green Claims  ("Proposed Green Claims Directive" or "the Proposal") within the next few months.  Together with the Proposal for a Directive empowering consumers for the green transition through better protection against unfair practices and better information ("Consumer Empowerment Directive Proposal"), the Proposed Green Claims Directive would contribute to the EU's green transition towards a circular, climate-neutral and clean economy by creating a common methodology for the substantiation of green claims that concern the environmental footprint of products, services and companies.It would aim to reduce greenwashing and enable consumers to take informed purchasing decisions based on reliable information about the sustainability of products and traders.

  If adopted, it is likely to significantly limit the environmental claims that businesses can make in the EU/EEA.  Businesses may want to consider approaching the Commission to try to influence the final legislative proposal that it is expected to present by March 2023.  Once the Commission presents its legislative proposal, businesses should consider proposing amendments to the European Parliament and Council. 

  Harmonization of the Rules on Green Claims in the EU

  Currently EU law does not explicitly regulate environmental claims.万博体育app手机登录Instead, environmental claims are subject to the general rules of Directive 2005/29 on Unfair Business-to-Consumer Practices and Directive 2006/114 on Comparative Advertising.  While the Commission and Member States have issued guidance interpreting these directives and their national implementation in the context of green claims, in practice there is a wide range of variations on the requirements for and enforcement against these claims among Member States.  The Proposed Green Claims Directive is expected to create a harmonized set of rules on the substantiation of voluntary green claims applicable to all companies operating in the EU/EEA.

  Covered Green Claims

  The Proposal is expected to define green claims subject to the new rules as "any message or representation, including text, pictorial, graphic or symbolic representation (e.g., labels, brand names, company names or product names), which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time."  The Proposal is not expected to apply to claims that cover aspects other than those related to the environment.  For example, sustainability claims would only be covered if they refer to environmental sustainability (e.g., preventingbiodiversity loss).

  The proposed rules are also only expected to cover voluntary claims made by companies in the context of business-to-consumer ("B2C") transactions.  The rules would also not cover environmental mandatory labelling or disclosures under EU environmental rules.万博体育app手机登录For example, mandatory declarations under Proposal for Ecodesign for Sustainable Products Regulation, or the requirements under the EU Taxonomy Regulation or the Proposal for a Regulation Establishing a Union Regulatory Framework on the Certification of Carbon Removals) are out of scope.

  General Rules on Green Claims

  The Proposal is expected to impose general requirements on the environmental claims that companies can make that will mirror those of the existing Commission's guidance.  In particular, it will require that companies:

  • only make environmental claims that have been substantiated through an approved methodology that meets specific criteria (see below); 
  • do not make a positive environmental claims where a product has both a positive and negative environmental impact.  Companies may communicate the positive claim only if they also communicate the negative impact in a clear and understandable way.  For example, if savings in water consumption lead to a notable increase in greenhouse gas emissions or to a negative environmental impact in another stage of the life-cycle of the product (e.g., CO₂ savings at the stage of manufacturing leading to a notable increase of CO₂ emissions at the use phase), both facts should be disclosed together with the claim;
  • make available the information on the assessment on which the environmental claim is based, including (i) information on the product or activities of the trader subject to the claim, (ii) environmental aspects, environmental impacts or environmental performance covered by the claim, (iii) the methodology used, (iv) the underlying studies or calculations used to assess, measure and monitor the environmental impacts or aspects covered by the claim, (v) a brief explanation how improvements in environmental performance are achieved, etc.  Access to this information may be provided in the form of a weblink, QR code or equivalent!万博体育app手机登录and
  • review the accuracy of their environmental claims (and their substantiation) at least once every five years from the date of the underlying studies or calculations.  In cases where there are circumstances that may affect the accuracy of the claim (i.e., when there are updates of the scientific methodology substantiating the claim), the environmental claim should be reviewed and updated immediately.

  Methodology to Substantiate Green Claims

  In line with current Commission's and Member States' guidance on environmental claims, the Proposal is expected to require economic operators to duly substantiate their environmental claims on the basis of a methodology that:

  • is based on widely recognized scientific evidence, state of the art technical knowledge and takes into account relevant international standards.  Where there is no recognized scientific method or insufficient evidence to assess environmental impacts and aspects, claims referring to such environmental impacts would not be allowed;
  • assesses the environmental impact throughout the whole life-cycle of the product;
  • takes into account: the product composition!素材制作从过程和产品使用中排出耐用性、可恢复性和生命终结性;
  • asesse万博体育app手机登录and
  • is regularly reviewed by a third party with a view to take account of technical and scientific progress and the development of relevant international standards as well as revised where necessary to reflect such progress.

  The Proposal is expected to add a lengthy list of additional requirements with which the methodologies to substantiate environmental claims must comply.  This is a significant departure from the previous, lighter requirements under the Commission's and Member States' green claims guidance.  In this context, the Proposal links these requirements to the existing EU Product and Organization Environmental Footprint methods ("PEF" and "OEF").  Where a company complies with the Product Environmental Footprint Category Rules ("PEFCRs") for a product, the claims made on the basis of the PEFCRs are deemed compliant with the requirements of the Proposal.

  Requirements Related to Comparative Environmental Claims

  The Proposal is also expected to include rules on environmental comparative claims, namely, that:

  • companies use the same methodology to assess the environmental impacts, aspect or performance of products or traders to which the comparison is made (e.g., where two traders make a claim on climate change, where one considered only direct impacts, whilst the other considered both their direct and indirect impacts, the results are not comparable);
  • data used for the substantiation of the comparative claim must be generated or sourced in an equivalent manner to ensure their comparability (e.g., choosing indicators on the same aspects but that use a different formula for quantification makes comparisons impossible, and therefore, there is a risk of misleading consumers)!and
  • the most significant stages along the value chain must be taken into account for all products and traders compared, etc.

  If adopted, these requirements are likely to make environmental comparative advertising more challenging for companies.  Product certification and testing is costly, and the proposed wording would in practice require companies to conduct head-to-head studies to be able to claim any comparative advantage.  Broad, sector-wide claims based on publicly available studies would no longer be acceptable.

  New Rules on Forward Looking Claims

  The Proposal is also expected to introduce new strict rules on forward-looking claims (i.e., claims that suggest that a product, service or company will achieve specific environmental benefits by a certain future date).The Proposal is expected to require that claims related to the future environmental performance of a product, service or trader:

  • be accompanied by commitments that include milestones to be achieved within clearly specified time frames (if a target set for 2030 does not include any periodic milestones, it is impossible for stakeholders, or the trader itself, to monitor whether they are on track and what are the challenges);
  • indicate a baseline year for targets and the indicators reflecting performance in the baseline year and the year linked to the improvement set out in the claim (e.g., "50% reduction of greenhouse gas emissions compared to 2015" instead of "50% reduction of greenhouse gas emissions");
  • not include actions or targets already achieved, etc.

  Enforcement and Access to Justice for third Parties

  The proposal is expected to introduce new and reinforced rules on enforcement against companies making non-compliant environmental claims.  Member States are expected to be required to carry out a compliance monitoring:

  • as part of their regular checks;
  • in cases where they have sufficient reason to believe that an environmental claim presents a risk of infringement of the rules, laid down in the Proposal!或
  • 响应.

  CompanyAfter receiving a notification for non-compliance, companies would only have 10 business days to provide an answer.  Where a trader does not provide a timely or satisfactory answer, enforcement authorities must require the trader to correct the non-compliant claim or immediately stop its communication.  The trader will have to implement the corrective actions within 30 business days.

  The Proposal is also expected to allow third parties to submit complaints against non-compliant green claims before administrative authorities, and thereafter courts, if the third parties have sufficient interest or have the rights infringed.   Such complains may lead to injunctive actions, including the immediate stop of the communication of the non-compliant claims.

  Next Steps

  The European Commission is expected to formally present its proposed Green Claims Directive by the end of March 2023.  Once presented, the European Parliament and Council will consider the Proposal for adoption through the ordinary legislative procedure.  This process will allow for the introduction of amendments and will take at least 18 months.  As indicated above, industry should keep a close eye on the development of this proposal as the requirements it will impose will have a significant impact on the current practices.

  //www.ludikid.com/2022/01/new-definitions-for-blue-and-green-hydrogen-the-european-commissions-package-on-hydrogen-and-decarbonized-gas-markets/ Rosa Oyarzabal、Paul Mertenskötter和Candido García Molyneux 弗里2022年1月7日19:36:06+00 欧洲能源和气候政策 氢气 收费 蓝氢 CBAM 欧盟碳边界调整机制 欧洲 欧洲联盟委员会 欧洲联盟 适合55 绿色氢 可再生能源 关税 //www.ludikid.com/?p=7674 p对齐='center'###p>去年12月, 欧洲委员会发布Hypen和去碳化市场一揽子立法(“包状”), 提出新规则开发欧盟氢市场新规则为欧盟气候能源管理框架中的蓝绿氢概念和作用带来了等待已久的法律清晰度Continue Reading… s/ec.europa.eu/commission/presscorer/detail/en/IP_21_6682The new rules bring much awaited legal clarity to the concepts and role of blue and green hydrogen within the EU's energy regulatory framework for the climate transition.

  In effect, the Commission's legislative Package is intended to promote the use of blue hydrogen until at least 2030 provided that it achieves the same decarbonization as green hydrogen (i.e., 70% GHG reduction).  However, the European Parliament and Council may amend both the proposed definition and conditions of blue hydrogen and the proposed regulative incentives during their consideration of the Package and its adoption through the legislative procedure that will now follow.  Moreover, the European Commission will be empowered to develop much of the methodologies implementing the definitions of blue and green hydrogen.  Companies intending to engage in blue and green hydrogen operations in the EU/EEA would be well advised to closely follow these developments.

  I.  The Legislative Package on Hydrogen and Decarbonized Markets

  The Package is yet another piece of the "Fit for 55" agenda to achieve the EU's climate neutrality by 2050 and includes three legislative proposals: (i) a proposal for a recast of the EU Regulation on the Internal Markets for Renewable and Natural Gases and for Hydrogen ("Proposed Gas and Hydrogen Regulation")!(二) 关于欧盟可再生能源和天然气及氢内部市场共同规则的建议(“

  Both green and blue hydrogen would benefit from this proposed beneficial regulatory framework provided they comply with the proposed definitions and requirements.  However, they would continue to be impacted differently under other parts of the EU's climate and energy rules, such as the Renewable Energies Directive ("RED II") and the proposal for a Regulation on a Carbon Border Adjustment Mechanism ("Proposed CBAM Regulation") and the Regulation on the Establishment of a Framework to Facilitate Sustainable Investment ("Taxonomy Regulation").

  II.  Renewable and Low-Carbon Hydrogen

  The EU's current energy regulatory framework fails to define renewable (aka "green") and low-carbon (aka "blue") hydrogen.  This legal uncertainty has hampered the role-out of green and blue hydrogen markets and infrastructure in the EU.  To correct this, the Package introduces new legal definitions of renewable and low-carbon hydrogen that the Commission will be empowered to detail by adopting specific calculation methodologies and threshold determinations in delegated acts.

  The Proposed Gas and Hydrogen Directive includes definitions of renewable and low-carbon hydrogen that are in line with those of the proposal to amend the Renewable Energies Directive II ("Proposed Directive to Amend RED II").

  • Renewable hydrogen is defined by reference to the definition of the Proposed Directive to Amend RED II, e., as hydrogen that (i) derives its energy content from renewable sources other than biomass!实现与化石燃料相比70%的温室气体排放减少量。
  Low-clent 定义为含非可再生能源产生并满足70%与化石氢比较的温室气体排减阈值。

  表示欧盟关于可再生(“绿化”)和低碳最大温室气体排放密度的规则大致相似,因为天然气和氢指令为两者都设置相同的去碳化效果标准(i.e. ,70%降温)。可再生和低碳氢减排阈值很可能使用“对开式”法计算,即计取勘探到生产过程的CO2排放,包括直到生产过程的运输,然而,委员会尚未确定绿色和蓝氢精确计算和测定方法(见下文)。

  Thus建议可再生和低碳氢的主要差值将是氢生产过程,特别是用于制造氢的能源源(iem>e.g./em>电解器中)。In effect, the aim of this approach is to allow low-carbon hydrogen to play a role in decarbonization and facilitate the energy transition until 2030.  The amended RED II would continue to promote green hydrogen, and various EU legislation, such as the Proposed CBAM Regulation, would likely impact blue and green hydrogen differently.  However, both blue and green hydrogen meeting the proposed definitions would benefit from the Package's proposed dedicated hydrogen infrastructure and market outlined below at least until 2030.

  The expectation is that by 2030 the EU will introduce a stricter GHG reduction threshold for the definition of low-carbon ("blue") hydrogen.  This threshold could be similar to that set under the draft technical screening criteria for gas investments under the Taxonomy Regulation, but that remains to be seen.

  III.低卡通氢元

  可再生和低碳认证: 可更新氢 需根据拟议指令认证,该指令要求委员会通过授权立法确定认证方法。

Hence, if an operator provides compliance with a recognized scheme, this will serve to satisfy the certification requirement for low-carbon hydrogen.

The Package applies these certification requirements equally to imported and EU-produced blue and green hydrogen, which may be related to recent efforts by certain Member States to scale up production of hydrogen both inside and outside the EU.  For instance, in December 2021 the Commission approved the German State aid scheme H2Global that also supports the production of green hydrogen in non-EU countries for its export to, and sale in, the EU.

IV.  Regulation of Hydrogen Networks

The current EU regulatory framework for gas energy carriers does not address the deployment of hydrogen as an independent energy carrier via dedicated hydrogen networks.欧盟一级没有基于收费价对氢网络投资规则(sem>/em>要求为网络运营商提供报酬以便充分投资于基础设施)或专用氢网络所有权和运营规则(sem>/em>unbunding规则)。拟议气流指令和拟议气流规范通过引入以下措施消除这些缺陷:

unbunding义务hydrogen网络操作员解构生产和供应活动,并在法律上和组织上独立于活跃于天然气或电传输和/或配送的企业,这意味着电或天然气现有传输系统操作员可能不作为氢网络操作员,至少在同一法律实体下除外。 /liThe legislative proposals establish tariff discounts for renewable and low-carbon gases.  In particular, the proposals envision discounts of 75% on entry and capacity-based transmission tariffs for renewable and low-carbon production and storage facilities.  The proposals would also eliminate cross-border tariffs for renewable and low-carbon gases to facilitate sales across borders in the European market.
• Revised investment decisions. Hydrogen network operators would be required to regularly assess market demand for new infrastructure investments.  Similarly, every two years, LNG and storage system operators would be required to assess market demand for new investments that would allow or expand the use of renewable and low-carbon gases in their facilities, and to take that information into account when they plan new investments.
• Certification requirements.The proposals would also require Member States to certify all hydrogen network operators.  If these are controlled by a person or persons from a third country or third countries, the regulatory authority responsible for the certification would be required to notify the Commission, which would ultimately decide on whether certification is granted.  Member States would also have the right to refuse certification if granting certification would put at risk their security of energy supply or the security of that of another Member State.

Next Steps

The European Parliament and Council must now consider the proposed Regulation and Directive for their adoption through the so-called "ordinary" legislative procedure.  This procedure allows the Parliament and Council to modify the proposals, for example to include further incentives and more flexible rules for low-carbon hydrogen.  The procedure is likely to be expedited so that the legislation is adopted within the next 18 months.

In the meantime, the Commission is also expected to start its preparatory work on the specific methodologies needed for the certification of renewable and low-carbon hydrogen.委员会将不得不作出技术决策,这些决策往往可能产生重大商业后果。受影响的公司或愿尽早与委员会接触进程。

On April 21, 2021, the European Commission approved "in principle" a Delegated Regulation establishing the criteria under which different economic activities substantially contribute to climate change mitigation and adaptation under Regulation 2020/852 on the Establishment of a Framework to Facilitate Sustainable Investment ("Taxonomy Regulation").  Among other things, the Delegated Regulation defines the climate mitigation and adaptation criteria that the manufacture of hydrogen must meet to be considered a "sustainable investment" in the European Union.

The Delegated Regulation's criteria on hydrogen constitute an additional step in the implementation of the European Commission's Hydrogen Strategy.While the European Commission must still adopt detailed rules on what should be defined as renewable (green) and low-carbon (blue) hydrogen, the Delegated Regulation sets the "gold standard" for the sustainable production of hydrogen.

Sustainable Finance: the EU Taxonomy Regulation

The Taxonomy Regulation implements the European Commission's European Green Deal and follows up on an earlier Commission's Action Plan on ‘Financing Sustainable Growth'.  The Regulation is intended to provide companies and investors with uniform criteria on economic activities that can be considered to be environmentally sustainable, in order to redirect capital flows and generate sustainable economic growth in Europe.  The Regulation's criteria are expected to increase transparency on the classification of economic activities that can be considered environmentally sustainable and, therefore, to limit the risk of greenwashing and fragmentation.

The Taxonomy Regulation establishes the principles, and requires the Commission to adopt specific criteria for the following environmental objectives: (i) climate change mitigation!二) 适应气候变化可持续利用和保护水和海洋资源向循环经济过渡防污控制保护并恢复生物多样性和生态系统。

委托规范:可持续氢活动标准

4月21日批准的委托规范建立技术筛选标准以评估所列经济活动是否有资格为减缓和适应气候变化做出重大贡献。 关于氢问题,委托规范建立以下标准: