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A coalition of NGOs, including Carbon Market Watch, warns that the European Commission's draft delegated act for permanent carbon removals—covering DACCS, BioCCS, and biochar—fails to meet the legal requirements of the CRCF regulation. The group argues the methodologies are of low quality, fail to address indirect land use change, assume automatic additionality, and lack sufficient MRV and liability rules for biochar. They call on the European Parliament and Council to object to the draft and urge the Commission to prevent the integration of these units into the EU ETS until quality is ensured.

The document outlines the structure of the EU's Carbon Removals and Carbon Farming (CRCF) certification framework and its associated methodologies for permanent removals, carbon farming, and carbon storage in products. It highlights the 'QU.A.L.ITY' criteria used for certification and expresses concern that the EU Carbon Removals Expert Group (CREG) is dominated by industry lobbyists, prompting Carbon Market Watch to commission independent expert reviews of the draft methodologies published in April 2025.

The document contends that the EU's decision to exempt international aviation from the ETS since 2012, largely due to US political and industry pressure, has failed to reduce emissions. It criticizes the ICAO's CORSIA framework as ineffective and calls for the EU to resume pricing international aviation emissions, proposing that the resulting revenue be directed toward global climate finance for vulnerable countries.

The Corporate Climate Responsibility Monitor 2025 calls for an end to 'creative accounting' and the reliance on voluntary frameworks in corporate climate action. It emphasizes that government regulation must become the 'backbone of climate action' to ensure that big tech, fast fashion, automotive, and agrifood companies implement substantiated emission reductions rather than relying on misleading carbon neutrality claims based on carbon credits.

The European Commission's proposed net 90% emissions reduction target for 2040 is criticized by Carbon Market Watch for being inadequate and lacking accountability. The analysis highlights risks associated with the potential use of international carbon credits, the absence of separate targets for gross emissions and removals, and the proposed integration of permanent removals into the EU ETS, which may create loopholes for polluters.

Carbon Market Watch argues that the proposed CLEAR Methodology for Cooking Energy Transitions contains shortcomings and optionalities that risk overcrediting. The organization recommends replacing arbitrary downward adjustments for the Hawthorne effect with scientific evidence, adopting a conservative 4:1 wood-to-charcoal conversion factor, and implementing the annual downward baseline adjustments required by the Paris Agreement Crediting Mechanism (PACM) Standard. Additionally, it suggests increasing the default leakage adjustment factor to 5%, updating fraction of non-renewable biomass (fNRB) values more frequently, and strengthening additionality testing by lowering the common practice threshold to 20%.

Carbon Market Watch critiques the EU Innovation Fund for disproportionately funding carbon capture and storage (CCS) and carbon capture and utilisation (CCU), particularly in the cement and lime sector. The organization argues that the fund should prioritize technologies that encourage material savings and explicitly include material saving as a mandatory assessment criterion for projects.

Carbon Market Watch argues that the EU ETS1 fails to drive industrial decarbonisation due to the continued allocation of free emission allowances, which it claims undermines the carbon price signal for sectors like steel, cement, and chemicals. The submission calls for the complete phase-out of free allocations and indirect cost compensation, suggesting that any remaining benefits be tied to decarbonisation milestones. It further advocates for expanding the ETS scope to cover all departing flights from 2027, including non-CO2 effects and flights to third countries, and extending maritime coverage to 100% of extra-EEA routes and all small ships by 2027. Regarding market stability, the document suggests maintaining existing Market Stability Reserve (MSR) and Linear Reduction Factor (LRF) rules until 2035 to preserve investment signals. Finally, it strongly opposes the integration of carbon removals into the EU ETS to avoid mitigation deterrence and the risk of using removals as a substitute for actual emission reductions.

The report examines four scenarios for extending the EU ETS aviation scope beyond intra-EEA flights, potentially increasing revenues up to 1,160 billion € by 2040. It argues that including non-CO2 effects and private jets would significantly boost funding for sustainable aviation fuels (SAF), rail infrastructure (TEN-T), and international climate finance (NCQG).

The Corporate Climate Responsibility Monitor 2025 finds that none of the 20 assessed companies demonstrate a climate strategy of 'reasonable' or 'high' integrity. The report highlights that 2030 emission reduction targets are increasingly 'unfit for purpose' due to structural obstacles, including incomplete emissions disclosures and sector-specific accounting malpractices. In the tech sector, soaring energy demand from AI and a reliance on outdated market-based accounting for electricity undermine target credibility. The automotive sector shows inadequate progress in phasing out internal combustion engines, while the fashion sector lacks commitments to reduce overproduction. The agrifood sector is criticised for relying on undefined land-based carbon removals to obscure a lack of structural emission reductions. The report argues for the adoption of transition-specific alignment targets to complement general GHG targets.

The report finds that the five largest incumbent light-duty vehicle manufacturers are making inadequate progress in transitioning to electric mobility. Most assessed companies have 2030 emission reduction targets that are critically insufficient and long-term net-zero pledges that lack concrete substantiation. While some companies have committed to procuring near-zero emission steel and aluminium, other critical transitions, such as reducing battery production emissions and improving electric vehicle efficiency, are largely neglected. The analysis highlights a significant gap between corporate pledges and the 1.5°C-compatible pathways required for the passenger transport sector.

The report evaluates the Article 6 carbon market rules finalized at COP29. It finds that Article 6.2 provides a weak, decentralized framework with significant loopholes in additionality, permanence, and accountability. Article 6.4 is rated more robust due to its centralized Supervisory Body and structured transparency, though it still lacks sufficient safeguards for land rights and permanence. The author argues that the current framework is not robust enough to ensure high-quality carbon credits and warns developed countries against using these markets to meet their NDCs.

The Corporate Responsibility Monitor 2025 finds that the tech sector faces a credibility crisis as AI growth drives exponential energy demand and emissions. The report argues that current accounting practices, which favor market-based over location-based reporting, obscure the true environmental impact of tech giants. While some companies like Google, Microsoft, and Apple show early leadership in renewable energy procurement and supply chain employment, the sector generally lacks transparency regarding third-party data centers, mineral sourcing, and device lifespans. The document calls for the GHG-Protocol and SBTi to mandate location-based reporting and for companies to adopt 24/7 renewable energy procurement targets to align with a 1.5°C pathway.

The report finds that current EU ETS cap trajectories are more ambitious than required by most climate neutrality scenarios, potentially leading to severe allowance shortages and price spikes after 2035. It evaluates several reform options to balance supply and demand, including adjusting the linear reduction factor (LRF), reforming the Market Stability Reserve (MSR), and integrating carbon dioxide removals (CDRs). The authors warn against the inclusion of Article 6 international credits due to risks to environmental integrity and the potential for market collapse. Recommended solutions include a combination of MSR replenishment and technological CDRs or a phased reduction of the LRF post-2035.

An open letter from Carbon Market Watch and other signatories urging EU leadership to reject the use of Article 6 international credits to meet 2040 climate goals. The authors argue that relying on international credits undermines EU leadership, poses reputational risks due to poor environmental integrity, fails to provide genuine climate finance, and increases the long-term economic costs of the energy transition. They call for a science-based domestic target of at least 90% net reductions to ensure environmental integrity and maintain the EU's credibility as a historic emitter.

The Corporate Climate Responsibility Monitor 2025 finds that major agrifood companies often rely on undefined land-based carbon dioxide removals (CDR) to meet emission targets, which obscures a lack of structural action on key transitions. While most companies commit to halting deforestation, they generally lack strong commitments to shifting toward plant-based proteins or reducing synthetic fertilizer use. The report highlights significant integrity gaps, particularly for JBS, and calls for standard setters like the SBTi and GHG Protocol to require separate targets for emission reductions and removals.

The report finds that while some fashion companies have improved their GHG emission reduction targets, these commitments often lack credibility due to a failure to implement systemic transitions. Key issues include a reliance on 'false solutions' like biomass and fossil gas instead of electrification, limited transparency regarding supply chain energy, and a persistent adherence to fast fashion business models that prioritise volume over value. While H&M Group is noted for its transparency in disclosing supply chain energy balances, the sector generally lacks the prescriptive guidance and regulatory interventions needed to curb overproduction and scale low-GHG fibres.

The document argues that the EU ETS1 is fit for purpose until 2035, after which a supply-demand mismatch for allowances may emerge. It strongly warns that integrating international carbon credits (Article 6) or carbon removals into the ETS would undermine the carbon price incentive, risk emissions mitigation avoidance, and divert investment away from domestic decarbonisation. For the upcoming ETS2, the brief recommends allowing the market to function for several years before making adjustments due to high price uncertainty. It also cautions against merging ETS1 and ETS2 due to differences in market actor price sensitivity and suggests maintaining national targets beyond 2030 to support the ETS.

The report finds that the tech sector is facing a "climate strategy crisis" as soaring energy demands from AI and the use of outdated market-based accounting methodologies undermine the integrity of corporate climate targets. While some companies like Google and Microsoft are pioneering 24/7 hourly renewable electricity matching, others like Amazon and Meta advocate for looser accounting rules through the Emissions First Partnership. The analysis reveals that absolute location-based emissions for all five companies increased from 2019 to 2023, and critical transitions—such as decarbonising third-party data centres and hardware supply chains—remain largely neglected or poorly reported.

The Corporate Climate Responsibility Monitor (v5.0) establishes a framework to distinguish genuine corporate climate leadership from greenwashing. It assesses companies across four pillars: comprehensive GHG emissions disclosure (Scopes 1, 2, and 3), the alignment of emission reduction targets with 1.5°C pathways, the implementation of sector-specific transitions, and the scaling of durable carbon dioxide removals (CDR). The guidance emphasizes that net-zero claims are misleading without deep absolute reductions and argues against the use of standalone Renewable Energy Certificates (RECs) and traditional offsetting in favor of 'climate contributions' and millennial-scale durable CDR.