Since the early 1990s, The Crow (1994) has been an important reference point of dark-toned, mystical fantasy cinema, and at the same time a cult film whose music, key scenes and lines that have since become catchphrases can be evoked regardless of genre. It also stands as a worthy tribute to the legacy of Brandon Lee, who died tragically young. For me, on one morning following the Brazilian climate summit, the classic line “it can’t rain forever” came to mind from the film, and it has been circling there ever since. I would not undertake to decide whether, apart from myself, there are still any hopeful believers left when it comes to the annually held climate summits, but when I read that the event held in Belém this year can be summarised more as a forum of major failures than of minor achievements, I have little factual ground to argue otherwise. COP30 therefore did not bring a breakthrough, and even the most positive commentaries merely emphasise that at least we did not move backwards. What then follows for us from the fact that the fossil lobby once again proved stronger, and that in the near future there is no real expectation that it will relinquish its position in the global economy? If we add to this the failure of the crusade against plastic pollution, the so-called Nairobi process, we are forced to ask ourselves an unsettling question: do the environmental and climate platforms operating under the auspices of the United Nations, including UNEP, UNFCCC and IPCC, still have any real relevance at all? If we are truly committed, we cannot ask this question outright, yet all that remains for us to hold on to is the thought that “it can’t rain forever.”
The EU as a Beacon of Light
Even if the green transition appears to be stalling at the global level, in our narrower environment we can at least find signs that give reason for cautious optimism. The European Union, while it cannot be fully satisfied, can hardly reproach itself, as it remains firmly committed to moving forward on its chosen path and to setting direction for the rest of the world, both in the field of greenhouse gas emissions and in addressing plastic pollution. One result of this commitment is that the regulation, integration and strengthening of the voluntary carbon market, despite all its practical challenges, remains an important priority for the EU. Moreover, in recent weeks several decisions of milestone importance have been taken with regard to the Union regulating and at the same time legitimising the voluntary carbon market, and through this, carbon offsetting as well as carbon credits. Climate commitments have been reinforced by Fit for 90, while the detailed regulatory framework for future-proof carbon removal credits, Carbon Removal Carbon Farming (CRCF), has finally been completed. Closely linked to this, and essentially as an integral part of the same policy direction, the EU-level bioeconomy strategy has also been adopted.
Fit for 90
Of the three regulatory pillars, this is undoubtedly the most widely known. It is essentially a climate protection itinerary written and set in stone through to 2040, under which the European Union requires its Member States to achieve a 90 percent reduction in net greenhouse gas emissions compared to 1990 levels within the next fifteen years. The complementary 5 percent rule allows a Member State to top up at least an 85 percent domestic reduction in greenhouse gas emissions with sufficiently credible carbon credits sourced from the international arena, a solution that I consider particularly forward-looking and well designed. On the one hand, this is beneficial for Member States because, as we have known since Pareto, achieving the final few percentage points is always the most costly. Purchasing offsetting elsewhere may therefore be cheaper than maximally squeezing the domestic economy, and it carries lower growth-related risks. On the other hand, from a climate protection perspective, it is equally effective if this 5 percent is realised outside the Union, since in the fight against global warming it is ultimately the global level of emissions that matters. At the same time, this approach allows the EU to provide financial support to countries where the scale of mitigation is not regulated to the same extent as within the Union. Finally, the new 5 percent rule may create business incentives for market participants to develop more projects, which will certainly stimulate the voluntary carbon market.
That said, we should keep a sense of proportion. The decade between 2030 and 2040, during which the transition from Fit for 55 to Fit for 90 must be achieved, will be neither simple nor inexpensive and entails significant risks. Moreover, the 2050 Net Zero deadline and the 100 percent target remain unchanged, meaning that the period between 2040 and 2050 will still leave EU countries with substantial tasks to complete in the context of the green transition.
Let us nevertheless remain optimistic and assume that the objectives of Fit for 90 are successfully met. This then raises the question of how much this actually helps the carbon market. The answer is very significantly. The EU’s net emissions in 1990 amounted to approximately 5 gigatonnes of CO₂ equivalent, meaning that 5 percent of this could theoretically generate additional annual demand of up to 250 million tonnes for high-quality carbon credits. To put this into perspective, the current annual turnover of the global voluntary market is roughly of this magnitude, meaning that this single EU measure could, over the longer term, potentially double existing demand in a market whose number one problem today is a lack of demand. Of course, this will not happen overnight, but market experts expect this measure to lead to a steady increase in demand of several tens of millions of tonnes per year.
The Regulation of Carbon Removal Credits
With regard to the detailed regulation of the CRCF, it is worth noting that through this framework the EU has adopted a transparency rule package applicable to voluntary carbon market certification systems that is entirely unique at the global level. In this context, the CRCF Directive was adopted last December, and by now its implementing regulation has finally been completed. The latter sets out complex quality requirements and focuses on the mandatory descriptions of monitoring and reporting processes. It also regulates the work of certification bodies and the auditing process. The objective is to make investments in decarbonisation processes, technologies and sustainable carbon management solutions more transparent, while filtering out greenwashing.The essence of the regulation lies in the fact that carbon credits falling within its scope, and the emission offsetting carried out using them, are legitimised by the EU and will be suitable for fulfilling legally binding obligations based on statutory requirements. Through a conversion mechanism, they thus become equivalent to the emission allowances known from the EU Emissions Trading System (EU ETS). This represents a major achievement and at the same time a significant opportunity for the carbon market.
However, the CRCF framework does not apply to all types of carbon credits, and in doing so the EU also clearly defines future directions for project development. The Union continues not to legitimise carbon credits generated from traditional emission avoidance or emission reduction projects. The new CRCF regulation, adopted at the end of November, groups the topic around two core methodologies: permanent carbon dioxide removal and carbon farming methodologies. The former focuses on the technological removal of carbon dioxide from the atmosphere and its safe, long-term storage. This category includes direct air carbon capture with storage (DACCS), the capture and storage of biogenic emissions (BioCSS), as well as biochar-based solutions (BCR). The latter methodology concerns enhanced carbon sequestration in forests and soils, as well as increasing photosynthetic capacity, in other words solutions linked to agriculture, forestry and land use. The ratification of transparent certification systems for these two approaches at Member State level could represent the most important step forward next year. If all goes well, these certificates could start to be issued as early as next year, with a validity period of five years.
Bioeconomy Strategy
Regarding the bioeconomy strategy, its development is an important achievement because it creates a completely new trajectory and opportunities within the greenhouse gas reduction universe. The EU’s plan is to shift the provision and production of food, biomaterials, energy, and related services from the current fossil fuel–dominated system to renewable, biological resources. The “channeling” of plants, animals, microbes, and so on into the carbon footprint issue generates an innovation spiral, a development curve, a more circular economy, and more green jobs—everything in this category is important because it links agriculture, fisheries, and biotechnology to the fight against fossil fuel use. The measures cover multiple areas. Firstly, the EU is establishing an EU Buyers’ Club for companies opting for offsetting, aimed at kickstarting voluntary CRCF units on the market, which is also an important step in generating carbon market demand. By aggregating the voluntary demand of private companies, the club will generate fresh revenue streams for, for example, forestry operations, strengthen biomass value chains, and offer a new EU-supported avenue for companies to fulfill their obligations through offsets. Secondly, the Commission is creating an EU Carbon Farming Database, providing methodological support for carbon market project developers like Mitigia in defining baselines, improving monitoring, and ensuring proper verification. Finally, the strategy also opens the door for the construction sector to adopt building materials and types that store biogenic carbon dioxide generated during production in the final product for the long term (at least 35 years), benefiting all stakeholders.
It is still too early to quantify the impact of these measures in 2026, but they represent important steps in the right direction. And indeed, the clouds over Europe are beginning to part, because as we know: “it cannot rain forever.”
This article was first published on the 26th of December by Levente Tóth, CEO of mitigia, on his personal LinkedIn profile.
