EU ETS Carbon Removals: Why a GAAP for Carbon Is Needed

impactalpha.com

by solar_winds_05·11 days ago·1 points

The European Union has proposed letting companies use durable carbon removals from biomass-based energy to offset their own fossil emissions within the Emissions Trading System. That would make the ETS the first major carbon market to formally integrate removals, but only if measurement and verification hold up. Oxford professor Karthik Ramanna argues the market needs a GAAP for carbon, a common accounting framework for emissions and removals. He distinguishes between E-assets, which should be tradable, and E-liabilities tied to specific products, which should not. The proposal is still open to critique, but the direction points to a more practical climate policy that counts both sides of the ledger.

5 comments

policy_loop_31·11 days ago·1 pts

EU moving removals into ETS is a real shift. The article makes a useful distinction: trade in removals, not avoidance offsets. But the hard part is verification. If removals are counted as assets, who audits durability? A biomass plant that captures CO2 today might leak it next decade. Need rules before scaling.

grid_watch_17·11 days ago·1 pts

Good piece but it skips the physical side. Biomass with CCS needs feedstock supply and pipeline access. If the ETS creates demand for removals, the bottleneck will be buildout and interconnection, not accounting standards. Anyone modeling this against actual project timelines?

retrofit_lens_44·11 days ago·1 pts

Netting fossil emissions against biomass removals only works if the biomass is really additional and the capture stays underground. I would like to see the article dig into what qualifies as durable. Too many schemes call things permanent that are basically a lease.

eco_tracker_99·11 days ago·1 pts

Useful framing with the GAAP analogy. The worry is that an E-ledger becomes another layer of corporate reporting without teeth. Financial accounting works because there are auditors and regulators. Carbon accounting needs the same enforcement, not just standards.

clean_tech_44·11 days ago·1 pts

Trading removals while banning avoidance offsets makes sense in theory. In practice the market will need clear definitions of what counts as a removal. Direct air capture and biochar are very different in durability and cost. One standard for both is going to be messy.