#39 - Biodiversity credits: the EU roadmap

This thirty ninth issue of The Nature Intelligence Newsletter provides an analysis of the recently released "EU Roadmap towards Nature Credits". It covers:

• The steps & actions the EU intend to take to foster nature credits

• The beginning of a market that will attract large scale institutional capital?

• Detailed analysis of how the roadmap may affect use cases and market infrastructures

Introduction

The European Union released its EU Roadmap towards Nature Credits on 7 July 2025. Overall, I think this roadmap is very encouraging. It sets a favourable policy environment for the nascent biodiversity credit market, building on ongoing pilots (including one in France) and workstreams (through Horizon, LIFE…), and the steps it includes are all sensible.

On a vocabulary note, the EU decided to talk about "nature" credits instead of "biodiversity" credits. I am not a big fan of this because it is vague and mixes very different things. It includes water for instance but water "credits" are very different from biodiversity ones. And the desired (and measured) outcomes are really biodiversity ones: healthier ecosystems and thriving species. For the purpose of this Newsletter, I will assume the EU actually means biodiversity credits.

The roadmap also distinguishes "credits" from "certificates" in a new but clever way: certificates are about high-quality actions undertaken by projects, while credits are about demonstrated biodiversity outcomes. Many standards have adopted the "certificate" wording but with a meaning different from the EU. It remains to be seen how all this converges.

What are the plans of the EU?

The course set by the EU for nature credits

Concrete steps & actions

I have compiled the steps listed in the roadmap:

As well as the concrete actions the Commission committed to implement by 2027:

Overall, these are very sensible and necessary steps.

The beginning of a market that will attract large scale institutional capital?

Sophus zu Ermgassen and Dr Samuel Sinclair summed up pretty well key arguments in favour or against the potential of the roadmap to significantly boost the biodiversity credit markets. At this stage, their conclusion is that it will not attract large scale funding for biodiversity.

Nature credits: a good idea but with limited potential as it is currently framed

Or even a distraction?

I broadly agree with the analysis of Dr Samuel Sinclair under current circumstances. Where I differ is that I believe biodiversity credits should have an important role in the future and that we should put in place the adequate market infrastructures and accept the "counterbalancing negative impacts" use case to enable that.

Detailed analysis of how the roadmap may affect use cases and market infrastructures

In previous Nature Intelligence Newsletter issues, I presented the 5 main use cases for biodiversity credits and the potential market size associated with each of them. I concluded that the use case with the most potential was counterbalancing negative impacts (after applying the mitigation hierarchy and with proper safeguards), but that this use case was controversial. Does the roadmap unlock that use case and thus the market?

Influence on the use cases

Let's have a look at each use case in turn:

1. Enhance carbon credits for better nature outcome

The roadmap talks about "mandatory co-benefits on biodiversity" for carbon farming methodologies under the EU Regulation on Carbon Removals and Carbon Farming (CRCF). This is a powerful lever and is probably the most impactful for biodiversity overall.

2. Access ecosystem services as inputs

This is not addressed in the roadmap and is anyway not a realistic use case as I explained earlier.

3. Contribute to nature recovery beyond own impact

Implicitly, this is the 2nd main use case covered by the roadmap (the first being the "premium carbon credits with biodiversity co-benefits" described above). But we know it has no significant potential. Why bother with the high administrative and monitoring costs associated with biodiversity credits if you only want to "contribute" to nature recovery? You can already do that with existing philanthropic projects.

4. Offer products bundled with nature recovery

Also not addressed by the roadmap and a very niche use case.

5. Take responsibility for unmitigated biodiversity impacts

It should be the main use case but it is not covered by the roadmap. The market is unlikely to take off without regulatory obligations for counterbalancing negative impacts and of restoration after applying the mitigation hierarchy (i.e. after avoiding and reducing negative impacts).

In conclusion

So the main obstacle hampering the market, the lack of consensus on use case #5 is not addressed. But use case #1 is strengthened and as the Commission notes:

"Integrating biodiversity into carbon certification could not only strengthen the ecological credibility of the certified units but also familiarise buyers with biodiversity outcomes, potentially laying the groundwork for standalone nature credit markets."

The EU Nature Restoration Regulation is also identified as a "a strong framework for ecosystem restoration, creating predictable demand signals for public and private investors. It is a cornerstone for generating nature-positive actions that can be recognised and verified”. This makes a lot of sense and depending on how it plays out in practice in the future, it may also be a driver for demand. At this stage, it is unclear whether the Nature Restoration Regulation will really have teeth for businesses or not.

Building the necessary market infrastructures?

Experience from other markets (including traditional finance and carbon markets) shows that a high-integrity and functional market requires a number of "market infrastructures". The roadmap goes in the right direction to build those but falls short in proposing robust next steps to build all the necessary infrastructures.

In particular, it should go further on the following 4 key market infrastructures:

• Regulatory and legal frameworks (legal status of biodiversity credits, compliance markets, etc.)

• Oversight authority ensuring market integrity (in particular an equivalent to the Integrity Council for the Voluntary Carbon Market or ICVCM for biodiversity)

• Grievance mechanisms

• Claim guidance (what companies can or cannot claim based on the credits they purchased)

Implicitely, it also seems assumed that the following market infrastructures (non-exhaustive list) will be covered by the private sector, which may or may not be the case:

• MRV

• Interoperable registries

• Independent third-party verifiers

• Rating agencies

• Trading platforms, price indices, …

• Financial plumbing

The roadmap does mention:

"Based on experience and consultations, and inputs from the expert group, the Commission will review progress made and consider next steps for the development and scaling up of nature credit markets."

So we can hope that these shortcoming are addressed in the future.

Further reading

Two posts I found interesting:

• Hanna Fiegenbaum on how the uneven spatial distribution of risks of biodiversity credit project failure should be taken into account

• Josh Ryan-Collins on why the public good nature of biodiversity makes it inherently hard to build markets attracting private capital to restore it

Overall conclusion

The roadmap is a clear signal of the interest of the EU for biodiversity credits and it is moving in the right direction.

It opens up the possibility of a regulation equivalent to the CRCF for biodiversity in the future (to be clear: this is not mentioned in the roadmap but it may be a logical next step). That would build a gold standard / north star for voluntary biodiversity credit schemes which would start aligning with it, just like carbon schemes are starting to align with the CRCF.

But a lot is still required to unlock demand and the EU would need to move faster and more boldly. The lack of mentions to "secondary market" or "counterbalancing negative impacts" in the roadmap highlights how controversial those topics are. But it will be necessary to tackle these difficult topic head on for the biodiversity credit market to scale up.

Disclaimer: all views are mine and do not represent any institution or initiative's.

Access previous issues of the Nature Intelligence Newsletter:

Case studies and examples

#01 - Impacts on ecosystem integrity of a listed equity index assessed for the first time - STOXX600

#08 - Getting inspired: 3 front-runners who assessed their biodiversity impacts at the corporate level

#09 - Ecosystem condition: direct measurement and assessment of regulatory offsets

Ecosystem condition definition and metrics

#02 - All you ever wanted to know about the MSA

#03 - Ecosystem condition: the indicator to watch for corporate biodiversity performance

Biodiversity measurement tools

#04 – Differences between the corporate biodiversity metrics

#05 - Charting path: navigating the biodiversity tool wilderness - part 1 - The compasses

#06 - Charting path: navigating the biodiversity tool wilderness - part 2 - The map

#07 - Charting path: navigating the biodiversity tool wilderness - part 3 - Tools for financial institutions

Biodiversity accounting

#33 - Accounting for biodiversity: differentiating and claiming responsibilities

#35 - Accounting for biodiversity: stocks, variations of stocks and supply chain accounting

Biodiversity-Related Financial Risks

#32 - Biodiversity-related financial risks: the tsunami hidden by the climate risks

Biodiversity credits

#10 - Biodiversity credits: definition and main actors

#11 - Biodiversity credits: uncovering the use cases

#12 - Biodiversity credits: deep-dive on use cases, demand and market size

#13 - Biodiversity credits: counterbalancing impacts with clear ecological equivalency rules

#15 - Biodiversity credits: lessons & key differences of 4 leading schemes

#16 - Biodiversity credits: 4 issues you need to know about

#17 - Biodiversity credits trends: market & price

#20 - Biodiversity credits: the cooking analogy - understanding indicators

#23 - Biodiversity credits - the ingredients - main indicators used by BC schemes?

#24 - Biodiversity credits - insights from a deep-dive on the recipe of 13 leading schemes

Align

#14 - Align - Best practices for biodiversity measurement & compliance of existing tools

The Ecosystem Condition Protocol (EC Protocol)

#18 - The Ecosystem Condition Protocol: introduction, needs, goals and linkages to other frameworks

#19 - The Ecosystem Condition Protocol: the what and how of this missing piece of the corporate biodiversity puzzle

COP16

#21 - COP16 - intro, disappointments and hopes

#22 - COP16 - progress on metrics, biodiversity credits, IP, DSI; failure on financing & monitoring

Thought leadership: Translating Biodiversity Goals into Action: A Global Budget Approach (2024)

#25 - Building biodiversity trajectories similar to climate: from global to companies

#27 - Building biodiversity trajectories similar to climate (part 2): global budget & trajectory and country ranking

Nature Tech

#33 - Nature Tech: the maps to navigate the 1000+ start-ups

#36 - Nature Tech: investors & state of investing

#37 - Nature Tech MRV (part 1): acoustics and eDNA

Nature finance

#38 - Biodiversity funds: the billions financing companies in transition and solutions

General biodiversity knowledge

#26 - Key concepts you should be aware of - part 1

#28 - From knowledge to action (part 1): science illuminates the path forward for biodiversity

#29 - AI & biodiversity: distinguishing real from false opportunities

#30 - The emerging trends to watch: NbS, RegAg, AI, reporting regulations

#31 - The EU Omnibus Package - What it means for business & biodiversity