The EU’s nature credits roadmap: a new era for biodiversity finance and nature-positive action

Raphael Der Agopian
Jul 9
4 min read

Nature is at the heart of Europe’s prosperity, resilience, and security. The European Union (EU) recognizes that healthy ecosystems underpin economic stability, food security, and climate resilience. As the world faces the twin crises of biodiversity loss and climate change, the EU is pioneering a new approach: the development of high-integrity nature credits. These credits are designed not to replace but to complement existing carbon credits, creating a holistic finance toolbox to drive both climate and nature-positive outcomes.

I. The rationale of nature credits

Economic and ecological urgency

Over half of global GDP and two-thirds of the EU’s added economic value depend on nature and its ecosystem services. Yet, ecosystem degradation is causing economic losses and increasing financial risks. Despite public funding commitments, such as dedicating 10% of the EU budget to biodiversity in 2026–2027 and doubling external biodiversity funding to €7 billion, there remains a significant financing gap. The Kunming-Montreal Global Biodiversity Framework estimates a global biodiversity financing gap of $700 billion annually, with the EU’s gap estimated at €65 billion per year.

The role of private capital

Bridging this gap requires mobilizing private capital alongside public investment. Nature credits, supported by robust certification and governance, offer a market-based mechanism to reward those who protect, restore, and sustainably manage ecosystems. They provide new revenue streams for farmers, foresters, landowners, and local communities, while helping companies and financial institutions manage nature-related risks and enhance long-term resilience.

II. What are nature credits?

Core principles

Nature credits are units representing verified, nature-positive outcomes, derived from certified actions that benefit biodiversity and ecosystems. Certification ensures that these actions meet high standards for environmental integrity and are independently verified. Credits are then quantified using recognized biodiversity metrics or indicators, tailored to diverse ecosystems and outcomes.

How does it work?

The process involves:

Certification: Independent verification that an action meets agreed standards for biodiversity relevance and good practices.
Crediting: Quantification of the positive outcome, allowing it to be monetized, registered, and transacted.
Market participation: Involvement of land managers, investors, companies, public bodies, and intermediaries such as certifiers and registries

Complementary with carbon credits

Nature credits are designed to complement, not compete with, carbon credits. While carbon credits focus on climate mitigation through emission reductions and carbon sequestration, nature credits target biodiversity and ecosystem restoration. Many projects, such as carbon farming, can generate both types of credits, maximizing environmental benefits. The EU’s approach leverages the strengths of both instruments to achieve climate neutrality and nature-positive goals.

III. The roadmap: key steps and timeline

2025-2027: stages of development

The EU's roadmap outlines a phased approach:

Year	Action
2025	Launch of EU expert group on nature credits; stakeholder engagement; international dialogue
2026	Adoption of carbon farming methodologies with biodiversity co-benefits; expert input on criteria and methodologies for nature credits
2027	Expert group provides governance framework recommendations; pilot projects launched; review of progress and next steps

Milestones

Expert group formation: Mobilizing expertise across sectors and Member States.
Pilot projects: Testing real-world approaches in countries like Estonia, France, and Peru.
Public consultation: Ensuring inclusive input from all stakeholders.
Standard setting: Developing methodologies, certification criteria, and governance frameworks

IV. Designing a high-integrity nature credit market

Certification, verification and transparency

Credibility is paramount. The roadmap emphasizes:

Strict criteria and principles to ensure transparency, prevent greenwashing, and avoid double counting.
Separation of roles to distinguish responsibilities for project developers, certifiers, and registry operators.
Alignment with existing standards, building on frameworks like organic farming and environmental-economic accounting

Avoiding greenwashing and ensuring additionality

Lessons from carbon markets highlight the need for:

Ambitious, science-based standards
Independent monitoring and verification
Clear use cases and reliable governance
Prevention of reputational risks

Nature credits must deliver real, measurable, and additional biodiversity benefits, with robust safeguards to maintain market trust.

Lessons from carbon markets

The evolution of carbon markets demonstrates the importance of high integrity and co-benefits. The EU’s Regulation on Carbon Removals and Carbon Farming (CRCF) sets a precedent by requiring biodiversity co-benefits for certified carbon projects. This integration familiarizes buyers with biodiversity outcomes and lays the groundwork for stand-alone nature credit markets.

V. Stakeholders engagement and next steps

The success of nature credits depends on broad engagement:

Expert group: Inclusive participation from Member States, public entities, businesses, land managers, scientific communities, civil society, and Indigenous Peoples.
Public consultation: Open call for feedback on the roadmap.
International cooperation: Active participation in global fora like the Biodiversity Credit Alliance and the World Economic Forum.

The Commission will review progress and consider further policy options based on pilot results, stakeholder input, and evolving market needs

Conclusion

The EU’s roadmap for nature credits marks a transformative step in biodiversity finance. By integrating nature credits as a complementary tool alongside carbon credits, the EU is building a comprehensive approach to address both climate and nature crises. This dual strategy leverages the strengths of both instruments, ensuring that Europe’s transition to a resilient, nature-positive, and climate-neutral economy is robust, inclusive, and scientifically grounded.

Nature credits will not only unlock new sources of finance for ecosystem restoration but also reward those at the front lines of stewardship. As the roadmap unfolds, the EU invites all stakeholders to contribute to shaping a future where nature and economy thrive together.

"With this roadmap, we are taking a bold step to recognise nature as a strategic asset for Europe’s future. Nature credits have the potential to attract essential private investment, while also rewarding those who are the custodians of our land and seas, including farmers, foresters and local communities. Our goal is clear: working hand in hand with nature and turning this into an opportunity for a resilient and competitive economy"

Jessica Roswall, Commissionner for environment, water resilience and a competitive circular economy

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