CDR’s Defining Policy Moments of 2025

Welcome to the CDR Policy Scoop, where we unpack carbon removal policy in 30 minutes or less. My name is Sebastian Manhart. And I am Ewe Tamme. Hey, Ewe. Hey, Sebastian. How are you? Good. Very excited for this special episode where we decided to do a 2025 review. Yeah. Today is the 16th of December, so it's basically almost the end of the year. I don't expect many big things to happen still this year.

And yeah, very excited to look back with you. Yeah, so the way I was thinking about it was the big policy developments for CDR in 2025, you know, positive or negative. But I would also kind of from my side bring into...

It's the general CDR governance as well, because we have some developments in the voluntary market that we could kind of typically still comes up in the policy discussion context. And of course, I think the interesting part will be... how our different focuses in this space will now complement each other also in our summaries, because I focus on the international and EU.

You look at that, but you look also a lot on what the countries are doing. So let's see this time around, how much do we have overlap and how much do we have something different? Yeah, I mean, I... I have five. I have two low points and three high points. Okay. Maybe let's start with a low point, right? And it's a bit generic, but obviously it affects CDI in many ways. And that is...

The U.S. administration's attack on climate science. And a couple of things, obviously, that stand out from this year is the withdrawal from Paris. plus side, we haven't seen many other countries replicate that behavior or any. But again, the US, the biggest economy in the world, retreated from it.

Second, then also, if you think just about how the discourse around climate change has been affected, when I think about the UN speech by President Trump, right, calling it a hoax, like the websites that have been changed in the US government. That is the big picture that really affected also CDR. Because if we go to CDR, the things that stand out to me is what happened at the Department of Energy, both the freezing of funds around the 3.5 billion DAC hubs, which has been a huge blow.

for for dark air capture the firing of a ton of great staff that have been working on this and then also and this is something that hasn't been passed yet but i know is in the works is essentially the a repeal of the endangerment finding by the EPA, which says that CO2 is essentially harmful to the environment and to people. And a lot of policy has been built off that. And I know they want to get rid of that, which has a lot of implications for.

anything that has to do with carbon removal explicitly. But yeah, I wanted to start there just because for me, when I think about this year, it's by far the biggest negative development that had a huge impact on what used to be probably the leading geography. for carbon removal policy, right? But yeah, did you have the US on yours?

I did not. Oh, wow. Yeah. But it's, again, because I don't focus as much on the US as you do. So I was looking at, I wasn't trying to stay true to, you know, where things are globally. I was trying to stay true to. what was like mainly in my focus i was going through what i had shared on social over the last year it's really interesting exercise actually because we forget things really fast i was surprised how much actually

happened in 2025. But I fully agree that the developments in the US have been... I mean, we know that there was going to be an impact and everyone knew, but... I guess we also thought that we already saw the first four years with Trump and we kind of assumed what it will look like. But this time it's very, very different. How did it affect in the CDR space? Where did it kind of... Cross into your sphere of influence more. What's been happening in the US?

I mean, obviously, when it comes to the international negotiations, right, the US stepping out of the Paris Agreement and the impact it had at COP30 in Belém. It's a very different atmosphere if you don't have a strong player who is advocating for ambition in this space. And that means that you basically have to... Yes, certainly fine tune the balances again and make sure that the leaders are there.

Not ideal. Also, a lot of questions around the demand for carbon credits from the US because many buyers are US-based. from the angle of carbon markets, lows of questions on this front. So over to you, did you also kind of have high and low points? Or was it just developments? How did you frame them? So let me look at my list.

I mean, I made a list and we will just see how far we get in the 30 minutes. I say we'll get through a few. I'd rather put them in the order of what I think is, yeah, it's hard to say what is most important. But not everything is a high point or a low point, maybe. So what I have on my list first is the EU's 2040 target, because we saw the proposal this year and we also saw the political agreement.

well, provisional political agreement achieved towards the end of this year. But we don't expect that agreement not to hold. So basically, we are assuming that this is what we will have going forward. I mean, I will say it has positive elements. to it and negative elements to it yeah that's fair so maybe when we start from the negative as you did

What I find very worrying is that if we look at the construction of it, we just have the 90% net targets. It was a real missed opportunity because what we wanted to see was separate targets, obviously, for reductions and removals. And now that is gone, plus this whole idea that Lewis CF is not behind as strong firewall as it was for the 2030 target. And now it's, you know, there's...

We know why, because it's difficult to get political agreements here to have more ambition. But it sets the scene for the next 15 years. And in this... scene basically removals don't play the role that I was hoping. they would specifically the separate target or what's the thing that exactly the separate target and also the flexibility the fact that now the countries have more flexibility to use removals from receive to balance like any any kind of

reductions they don't manage to achieve somewhere in other sectors. That is just not great. But of course, this is... the negative part of it, I would say. Of course, I mean, the target itself could have been more ambitious, right? The flexibility has watered it down quite a bit. But the great thing is that we do have a framework in which everything else will now operate. And that will catch us further. So hopefully all of this will then trickle down into the other.

legislative proposals, whether we are updating existing legislation or creating new ones to actually be able to achieve this 2040 target. But yeah, it's kind of difficult and less so. Recently, I was asked about the EU CDR ambition in the context of one event when I did presentation. And I was thinking, yes, what is EU CDR ambition? It's really interesting angle.

We don't really have clear numbers. We have the European Scientific Advisory Board on Climate Change that said that, you know, we would need the order of, let's say, 250 million tons of removals from BEX and DAX, for example, by 2050. which was a lot more than the Commission had envisaged. But we don't have clear numbers. Not yet. We cannot really quantify the EU CDR ambition. And I really hoped that we would be able to with a 2040 target. Yeah.

But I do think, and one thing I had here, which links into your point is, I do think Europe has stepped up this year. Like already we, you know, it was a bit in the shadow of the US, I felt in the past when it came to CDR policy, because the US had the big announcements, had the big pots of money. And with that retreat that we just discussed, we are seeing the EU being in the spotlight.

And all eyes are on what the EU is doing. And I think it is delivering on many fronts. Like I, for example, noted down the incredible progress on the CSEF and the fact that we have three methodologies basically up and running. I mean, at this point, it's really just a formality before they can.

be published and then and then adopted and then also the progress on the initial stages of the purchasing program or the buyers club the ets integration for next year plus the 2040 law where essentially cds for the first time explicitly embedded at this really high level policy. So for me, Europe did live up to its expectations. Yes, we are missing some pieces like that you just mentioned, but I think a lot of good stuff is happening in Europe is.

replacing the US in many ways as the prime geography where CDR policy is being developed. Yeah. And you always look at things from a more positive angle. I have negative points. Don't worry. I do think a lot of good work has happened in Europe this year. No, but I did love the guidance that comes from this proposal also for the next year, but that's a topic for a different conversation. Exactly.

So we got the EU, which I think was an important one. One that you already mentioned in the intro, but as kind of second low point, just to get all the low points out and then we can kind of end on high fives.

is the limits of voluntary frameworks have been exposed, I think, this year. Because if I think about the SBTI in particular, there were very high hopes in 2024 about what 2025 would bring. we had heard a lot of positive signs we'd heard you know interim targets were being discussed big volumes were discussed then we had the draft released in March which kind of was a

you know, yeah, a little punch in the gut, I think. And then the latest draft was like a KO, right? And so I think that was really, that brought us all down to earth to see that we're probably, we shouldn't expect anything much from the SBTI. So yeah, definitely have that. I know it's not government policy, but it's still something that we've covered quite a lot in this show. So I thought I'd bring it up.

It was on my list, but far enough down that I didn't expect to get there. But I'm happy that we brought it up because it's true. The expectations were high. The science tells us that we really need to start scaling up remote. But then the Science Space Targets Initiative has no requirements before 2035. 2035 is, you know, it's 10 years lost in between now and then.

And even then, 2035, what kicks in is not a hard requirement to buy CDR, right? That comes at net zero. And even then, it's not like for like. There's so many... caveats that I think it turned from a real promise into just firefighting, right? What I'm seeing CDR doing now with the SBTR is firefighting is not leveraging this as an incredible growth opportunity. And so, yeah.

Big disappointment. Let's see how the final version looks like. Yeah. It is a draft we should stress. So the next one I would bring up is from the... price agreement trading mechanism and the non-permanence and reversal standards. So we've had already a couple of sessions here at the CDR Policies Group on this as well, because it created, I mean, there was a lot of confusion around it, a lot of different viewpoints around it.

It was also very much front and center also in the discussions in Belém. So it basically, it was half a year of this topic being very much on the front line. And I mean, it's just... Why couldn't we have more clarity? Why were all the difficult things left on the methodology level? I feel that it was a real missed opportunity.

So I would say it's great that we have the standards. Again, I'm not saying it's essentially a low point because having the standard is better than not having one. I think so. But it could have... done some of the hard work that is now basically left for methodologies. And that creates so much confusion and uncertainty. Where did we end up in the end?

Well, all the difficult elements are left to be tackled on the methodology level. So the standard doesn't answer those questions, the big ones that we actually set out to answer, the most difficult ones. And that's not by design. That's not because they wanted from the beginning to…

shift that to the methodology specifically that no well that was the only way it seems like they could reach an agreement because they couldn't agree on the details to put in there so they kicked the can down the road And we could end up with different requirements and different methodologies. I think that's the figurative speech we've heard many times in this specific context. Yeah. Okay. Let's shift to some...

i think some positive news sure at least on my end i mean there's plenty of stuff that i think went very well this year for me one country that stood out that we've covered a few times has been the uk yes and what i really liked about this case study is that it transitioned i mean we had an election and we went from conservative to labor government but actually we saw a continuation of ambition when it came to to cdr and that is great news because often there's a flip-flop right

And specifically this year, I mean, we saw the implementation of the business models, the carbon contracts for difference. They already selected the first two suppliers, one BEX, one DAX project. There's a lot of money on the table for CCUS, including DAX and BEX.

We also reported on their independent review, carbon removal review that they have done, which is a fantastic suggestion of all the policy options that the UK has when it comes to removals. They've been very clear about integration to the ETS.

potentially a couple of years earlier than the EU. So I really feel that there's been momentum, there's been money. We met some of the policymakers, right? They are fantastic. They have a great team. They're really set up for success, I feel, for the next couple of years. So yeah, the UK for me has definitely been a country that should give us some hope for the direction it's going. And I expect great work from them the next year as well.

Yeah, UK was also on my list. I feel like it's inspirational what they have achieved and many of these things they've had to... figure out basically for the first time themselves, because they didn't have existing blueprints to use. So there might be outsized impacts on what they're doing. I think other countries have a lot to learn from them and to take over from them. I do wish. You know, for example, the business models could be a bit broader in scope. Yeah.

But again, if we had to choose between having them as they are or not having business model at all, definitely let's have it with this scope because there's still a chance to expand it going forward. But they seem very...

very deliberate about how they're going about their policymaking. I know that some things kind of developed in parallel. Yes. So they're now trying to figure out how to bring them together. The business models, the ETS integration, those are things that weren't designed from the beginning to link together.

But besides that, I do feel that the team has a pretty holistic view of how they want to develop CDR policy. So I'm sure that things that are not part of the business models, like biochar, like enhanced weathering, they're already thinking about how they can promote them with other tools, right? So, yeah.

Great work there. Over to you. So I think one positive development, again, coming to the EU is the CRCF. progress because now we are very close to having permanent CDR methodologies. So for Backstacks and BioShare already agreed, we have already adopted implementing rules on many of them. implementing framework itself. So it's great to have clarity on how this will look like.

Especially, we already had a session on this as well, but the fact that the rules were ironed out on proprietary mobiles, there was, I think, a lot of work going into it in the background. to make it work. And now we have something that's, and not everyone, because everyone will never be happy, but most stakeholders are comfortable with.

And these are the first methodologies that will be adopted under CRCF rights for permanent immobiles. So I think it's great progress, a lot of work that has gone into it. So from 2025, I wasn't sure. if when these first drafts were shared in August, I think it was, that we will be here where we are today in December of the same year. Yeah, and I mean, I'm really surprised that the CSEF broadly stuck to time.

like there haven't been major delays right like it seems like despite at times huge differences of opinion the commission with its consultant has kind of managed to yet to keep things moving to keep the ball rolling and that is no easy job

And I've been very impressed that we are where we are now. I understand that on the carbon farming side, it will take longer. There's a lot of complexities there. But as you said, both the implementing act, right, and the first three delegated acts for permanent removals.

Yeah, that's huge. And you've been part of the process from the beginning. You've been very involved, right? So it must be very rewarding as well to see it come to fruition. Yeah, it's great to see, because in the beginning, we really didn't know how it all would look like. And now it has really... taken shape. I mean, many questions remain around the use cases and so on, but we'll not get into this, but the fact that

The framework itself, like the implementing of the framework is now really, you know, the progress is steady and it's following the timeline. That is huge. It's actually not easy to achieve in the EU policymaking context. Yeah. No, amazing. Next one I have is also at the country level, like I had earlier, which has been the progress in Germany. And again, for me, Germany is interesting because when I first looked at it seriously three, four years ago.

Germany was a real laggard, right? Like it was, if anything, there were a lot of reasons not to do CDR in Germany more than doing it. But nowadays, at least in Europe, if not globally, they are putting their weight behind carbon removal, right? They've approved almost 500 million in their annual budget for carbon removals. They've got a CDR department. They've legalized transport and storage.

And we see that there's significant support in the coalition, the governing coalition for carbon removals. And for me, it's been incredible to see kind of this transition over the years and seeing the support it's getting. And so, yeah, I've got high hopes and more than anything, I'm really excited that there's money on the table.

Because, yeah, we need all these frameworks, but even the CSEF, we don't have a use case, right? And so it's great. I want to celebrate it. But what we need now for carbon removal in the next two, three years in particular is money. And ideally from government. And so when the UK, when Germany, when they actually put money on the table, that's worth a lot. So yeah, very excited about that one. Yeah, that's great. I actually didn't, we're always more efficient than I think.

So we're now getting to these additional thoughts I listed down for myself, like already off the big list. And so one of them is clearly policy related, and that is the...

Another low point, the fact that green claims directive didn't go anywhere and is now basically off the table. There were huge hopes there. It was supposed to provide a use case for the CRCF and that is not now happening. Yeah, not ideal. I don't know if you did. Did this make your lists? Now I'm also going into kind of the bonus items. I had the green claims there. For me, the green claims has been a really odd one for various reasons, because I personally actually...

I attach a lot of importance to it. And I noticed that whenever I wrote about it, it got way less attention and engagement than pretty much anything else I wrote, which really surprised me because it's such an important topic. And the other thing that always surprised me was that even within... our bubble, people seem to have completely opposing opinions. And that people, some people said, oh, we really don't, we shouldn't have the green claims. It's just going to create.

more burden, we don't need it. And others like, yeah, we need that clarity. So even within our bubble, there didn't seem to be that advocacy in favor of it. So I've always been a bit puzzled by the green claims. And I actually think it's a huge loss that this is not happening because as we... Anyone who listens to this podcast will have taken away from the last couple of episodes we did. Corporates need a why. Corporates need a reason. They need to be able to claim.

And what we end up with is this puzzle of different national legislations and case law and everything else. And that's not workable. And I don't see, I know this.

different proposals of how potentially we could have something that resembles the green claims fit into other pieces like even the cscf review and stuff but i don't know if that's going to happen and the green claims would have taken care of a lot of things so big loss in my view yeah i was not paying too much attention to it until I realized that that was supposed to be the main place where the immediate use case would emerge from before we will get the use case of the EU ETS.

And then realizing that's okay, that is not happening. How many times did the commission say that we are not going to explain the use cases in the CRCF regulation or in any of the implementing a delegate acts because it's not within the main regulation? It's all because it's going to come from elsewhere. And then suddenly there is no elsewhere and we have to make do with it. So it's just, it's a pity. Well, another country.

that made my bonus list is Switzerland. And Switzerland has done, there's a lot of things we could cover about Switzerland, but what I wanted to highlight has been their leadership on Article 6. both in terms of the amounts of agreements. I think they're at 15 now. The website says 30, but whenever I speak to them, they say 15. So there must be a couple in the works. But like they've done a ton of agreements and they've done the first agreement for durable CDR specifically with Norway.

And that was this year. And I think it's just it's great because they are really trying to test the rails that will be used, hopefully at scale in the near future. Right. So they're doing all the groundwork that other governments can then build on.

And also when you talk to them, I mean, we've had Veronica on the show, we're going to have Sophie on the show in January, right? But when you talk to them, they really know their stuff, like they understand how this mechanism works. They're very involved, very engaged in the development of it.

And if we're going to make Article 6 work, it takes pioneers like Switzerland to do the early work. So I was really happy to see that they keep doing it. And they keep really focusing also on the durable removal side of Article 6. Yeah, Switzerland. I was sure that Switzerland will get a mention from you. There's no question about that. But it also brings me back memories. A few years ago, I met Veronica there in Zurich.

I remember talking about Article 6 and the pioneering work that they do and I felt that there were so many very difficult questions and her reaction to some of these were No, this is actually simple. Look, this is how we do it. And it's a completely different mindset. We need more of that. We need people who see solutions.

And get things done. Yeah, many, many countries will have a lot to learn from how Switzerland has approached it. They do have some frameworks in place that are very helpful that they can just easily tap into in this work. But yeah, it's been inspirational.

And I saw, I mean, just lately, they're also, and maybe I should mention this here when we're already talking about Switzerland, they provide... guidance to corporates about interim targets for carbon removal on their path to net zero right like again what we discussed what svti is not doing switzerland is i think the best example we have of a government trying to fill that gap and trying to create clarity for corporates because they want their plan is not to buy the...

removals themselves right like their plan from the beginning is to have corporates buy the removals and to create clarity for corporates why they should buy them and potentially to incentivize or punish them And they're building all these frameworks now around that to make that happen. And again, that's so interesting because I don't see many other governments trying to figure out how and why corporates will buy CDR.

And again, others can probably learn from what Switzerland is doing there. So there is one more that I actually should have added earlier.

in this conversation, but that's the fact that Unis for Durable Removals are now eligible under Corsia, which is potentially, you know... quite large market with a quite large demand. And we know that there's going to be difficulties with supply there. So, I mean, there's a list that are eligible now. That list will probably grow over time, but that's a great development.

Do you think that's going to happen anytime soon? Like, what's the incentive for an airline to buy removals on the course of the year? Well, there are airlines buying engineered removal credits today, right? Even without... clear incentive from Corsia necessarily. So that is happening. But one thing is that it seems that there might not be enough credits to be available to match the demand to begin with. So at some point when the cheap demand is gone...

the only things you have left with are more expensive ones. Another option is that airlines, some of them are bound to maybe also tap into. looking at bundling cheaper and more expensive credits, as we see happening on the voluntary market anyway, a portfolio approach. So trouble removals could play a role there. So I think that's a really welcome development.

Nice. And specifically, this is isometric for now, right? And potentially Puro? Or where do we stand? So for ICBCM, there's Vera, there's cold standards, because also they have certain removal. methodologies and then ACR. Let's see how this list expands. And another one on the side, of course, is ICBCM, but that's a slightly different role and use case, where we also have more and more remote programs and methodologies being CCP.

labeled wow uh overall mixed bag i would say huh like we covered some real lows, I would say. But then there has also been progress. So yeah, that 2025 on the policy front seems to have been pretty mixed for CDR. It's mixed, but I would still see it's progress. I would say it's progress. We're not moving backwards.

For sure. Definitely. Excellent. Well, this was great, Ewe. I know we've got a forward-looking episode planned. So a quick teaser to anyone who enjoyed this one. If you want to hear what we think about next year, yeah, stay tuned. You will hear an episode very soon. Thanks. All right. Bye, Eva. Bye.