😳 Conversion factors for CDR in the EU ETS? 😳

🤷‍♂️ When you think you’ve seen it all, there comes another curveball.

🇪🇺 The European Commission is considering introducing “conversion factors” for carbon dioxide removal (hashtag#CDR) credits when they are traded within the EU Emissions Trading System (hashtag#EUETS).

🃏 The idea is that an ‘exchange rate’ could be applied according to the permanence and quality of the CRCF removal units. Think Settlers of Catan for CDR.

So, for example (arbitrary numbers I am picking for illustration purposes):

➡️ 2 Biochar Carbon Removal = 1 Direct Air Capture

➡️ 10 Afforestation = 1 Direct Air Capture

🙅 As I explained to Carbon Pulse yesterday (see comments), to me this is clearly a step in the wrong direction: CDR needs to become a commodity market, with fungible units that can be traded interchangeably. Only this will allow for the seamless use within compliance markets but also open the doors to other financial markets and stakeholders.

👎 Any attempt to move in the opposite direction and introduce new complexity – such as the idea of permanence conversion factors – should therefore be rejected. We risk opening a bottomless pit of impossible comparisons. Plus, this could open the door to temporary removals in the ETS.

💪 Instead, our focus should be on strengthening the permanent CDR methodologies and certification processes within the CRCF to give us full confidence in the interchangeable use of its units for the ETS.”

⁉️ Alright folks, I am curious to hear your takes on this.

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