EU endorses Buyer’s Club as financing strategy for CRCF credits

The European Commission will establish an EU Buyer's Club to incentivize demand in the bloc's voluntary CO₂ removals market, the Directorate-General for Climate Action said Dec. 1.

The commission intends to pool voluntary demand from private companies to help generate revenues for European farmers and foresters and to support biomass projects.

The Carbon Removals and Carbon Farming framework is an EU initiative for certifying CO₂ removals, carbon farming and carbon storage projects within the bloc.

"This voluntary initiative will provide a clear demand signal for carbon farming and permanent carbon removals under the CRCF Regulation," the EC said.

The approach is part of the EU's new bioeconomy strategy announced in the week ended Nov. 29, which seeks to prioritize renewable and biological resources from land and sea as alternatives to critical raw materials.

Project financing

A Buyer's Club would involve competitive project tendering, reverse auctions, as well as a flat-rate price through private funding from corporate purchases, according to the EC.

Earlier this year, the commission put forward a study together with the Ecologic Institute outlining several potential purchasing programs for financing carbon removals under the EU's flagship crediting initiative for removals.

Several methods were presented alongside an EU Buyer's Club, including a removals fund, a centralized purchasing platform, an independent foundation and a Carbon Central Bank.

The Buyer's Club approach would mean the EU will cover operating costs and seed funding, according to the study.

"We see crowding in private money as a key goal of the announced Buyer's Club and there lies great potential in such an initiative to drive additional CDR scale-up," said Francesca Battersby, senior policy analyst at non-profit Carbon Gap.

However, Battersby noted that the announcement does not specify the role public finance streams will play in financing carbon removals.

"It seems the EU's approach to CDR is to bring safety via methodologies (the CRCF) and other rules for buyers, whilst private sources should be responsible for bringing the majority of investments. This is a first, "low regrets" step towards developing the CDR market," said Battersby.

Further efforts will be needed to operationalize the purchasing program. For example, the EU could introduce a "Claims Safe Harbour," a mechanism that would allow buyers to invest in high-quality removals without risking their investments being stranded later on, the analyst added.

Operationalizing CRCF

The EC also announced that it will establish an EU Carbon Farming Database to streamline the monitoring, reporting and verification process and help companies report their Scope 3 emissions.

Furthermore, the commission said it intends to publish additional CRCF methodologies in 2026, including one for Carbon Storage in Buildings.

"[This] will help building owners demonstrate the carbon-storage performance of their buildings, helping bring the construction sector in line with circular-bioeconomy principles," the directorate said.

The EC published legislation Nov. 20, setting out the rules for CRCF certification, including those for certification programs, certification bodies and audits.