Sliced: Europe is Defining Carbon Removals and International Credits

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This year has already been a flurry of movement in carbon markets and climate policy. For this edition of Sliced, I’ve been scratching my head about what to write as there have been no shortage of headlines, frameworks, and consultations to choose from. But my mind kept circling back to two recent EU announcements that, taken together, feel rather consequential.

The first was the EU’s adoption of the world’s first voluntary standard for permanent carbon removals. And the second, was the launch of a consultation on how international Article 6 credits might be used in Europe after 2030.

One is about building credible supply at home, while the other is about deciding how much Europe will look abroad. The interplay between the two tells us a lot about where climate action, finance, and carbon markets are heading.

The European Commission’s adoption of the first certification methodologies under the carbon removals and carbon farming (CRCF) regulation is a supply-side intervention. For the first time, a major jurisdiction has put legally grounded rules around what qualifies as a permanent carbon removal – covering direct air capture with storage (DACCS), biogenic capture with storage (BioCCS), and biochar.

This matters not because it creates “another standard” and more because it creates regulatory certainty. Developers now know what counts. Investors know what risks are acknowledged and managed. And policymakers have something concrete they can, eventually, plug into climate targets without reopening the greenwashing debates of the last few years.

From a supply perspective, CRCF could be catalytic. Clear methodologies should lower barriers to entry and make it easier for capital to flow into early-stage technologies that have struggled to scale under fragmented voluntary standards. The EU’s signal is that permanence, quantification, and sustainability are not negotiable, and that projects meeting those bars will be recognized across 27 member states. Beyond Europe, this may well become a reference point – not because others are forced to follow it, but because global capital likes consistency, and Europe is offering it.

Demand, however, remains the unresolved half of the equation. While CRCF defines how high-quality removals can be supplied, it does not yet guarantee who will buy them, at what scale, or on what timeline.

The Commission is clearly aware of this gap. To help kick-start voluntary demand, it has announced the creation of an EU Buyers’ Club for permanent removals and carbon farming under the new EU Bioeconomy Strategy, alongside efforts to better mobilize both public and private finance. Support from the European Innovation Council and the Innovation Fund is meant to accelerate early deployment and scaling, particularly for technologies like DAC and biochar. These signals matter…but they remain catalytic rather than decisive. Without clearer pathways into compliance systems or national targets, demand risks lagging supply, at least in the near term.

That’s where the second announcement – the Commission’s consultation on post-2030 use of Article 6 credits – comes into play. Here, Europe is explicitly grappling with whether and how international carbon credits should contribute to its 2040 climate goal, and how that contribution compares with domestic action. The political agreement to allow up to 5% of the target to be met with international credits sets a ceiling but leaves everything else open.

This consultation is about future demand and system design. Volumes, quality thresholds, eligible project types, and possible interaction with the EU Emissions Trading System are all on the table. The numbers being discussed are not trivial because even a tightly capped share could translate into hundreds of millions of tonnes of demand over time. The way the EU answers these questions will determine whether international markets see Europe as a major buyer, or whether domestic removals, under CRCF, become the preferred route for compliance and credibility.

Seen together, these two moves suggest a deliberate strategy. By first anchoring a robust internal framework for removals, the EU reduces its future dependence on external supply. Article 6 credits are not being rejected, but they are being treated cautiously, and positioned as a supplement, not a substitute, for domestic climate action.

This sequencing matters for finance. Capital is far more likely to back projects – inside or outside Europe – if it can see how, and whether, credits will ultimately be recognized within regulated systems rather than confined to voluntary claims.

For climate action beyond Europe, the implications are mixed but important.

On one hand, stricter standards and capped demand may limit the scale of international credit flows compared to more permissive regimes. On the other, they could raise the bar globally, pushing markets toward higher-integrity outcomes and away from low-cost, low-impact credits. In that sense, Europe may be shaping not just its own transition, but the norms of a post-2030 carbon market.

If there’s a common thread between these announcements, it’s intentionality. Europe is trying to avoid repeating past mistakes – flooding markets with questionable credits or outsourcing ambition – while still keeping international cooperation on the table. Whether this balance holds will depend on decisions still to come.

But for now, these two moves mark a shift from abstract debate to concrete architecture, and that’s why they keep pulling my attention back. Let’s see what happens.

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