Building Towards Nature Markets for the European Union
The case for an EU wide enabling framework for Nature Credit certification.
February 24, 2025
The value and benefits of healthy natural ecosystems are, quite literally, priceless.
For every business, landowner and farmer, innovator, public sector authority and citizen of every EU Member State, our collective survival ultimately depends on the stability of the natural, life-sustaining systems all around us. Evidence of the impacts of nature loss on the competitiveness of Europe’s economy is also growing. For example, the European Central Bank has warned that the economy and banks critically need nature to survive, while a landmark study by De Nederlandsche Bank found that Dutch financial institutions alone have €510 billion in exposures to biodiversity risks.
At the same time, science tells us that natural climate solutions to protect, better manage and restore forests, grasslands and wetlands could contribute around a third of the cost-effective emissions reductions needed to avoid the worst impacts of climate change.
Unlocking Private Finance for Nature Alongside Public Funding
The Nature Conservancy welcomes the European Commission’s new focus on incentives for nature-positive actions and the commitment by new Environment Commissioner Jessika Roswall to explore the role of nature credits. We also support the Commission’s recognition, in its new EU Vision for Agriculture and Food, that nature credits could and should reward farmers and landowners for verifiable measures that boost ecosystem services, benefiting wider society.
In recent years, we have been actively advocating for innovative financing options, including nature credits, as a potential financing pathway for contributing to the implementation of the Nature Restoration Regulation and other Nature Directives in line with the EU’s commitments under the Global Biodiversity Framework.
Nature credits will never be the silver bullet for closing the nature financing gap, and we still urgently need governments to pursue all the financing pathways set out in the 10 point plan for financing biodiversity endorsed by the EU and over 40 countries. However, there is growing international interest and momentum around biodiversity credits, as stipulated under Target 19 of the new Global Biodiversity Framework. Last year, our joint study with the Institute for European Environment Policy clearly set out the longer-term role of these innovative financing measures in mobilising public and private funds in the next Multiannual Financial Framework (MFF—the EU Budget). To scale and accelerate private finance for nature, the EU must engage with civil society stakeholders, industries, financial institutions, development and commercial banks and other investors while ensuring continued public funding for climate and nature resilience.
The Wendling Beck project demonstrates how large-scale habitat restoration can generate biodiversity credits whilst also supporting sustainable agriculture.
So what should happen next?
The only way to grow credible and effective nature markets is by setting out clear, scientific and policy governance to underpin the development of high-integrity nature credits from the very outset. Market actors and investors from all relevant sectors have been telling us that the absence of agreed scientific definitions and policy governance is holding back investments, even in the voluntary sectors. For example, our joint report with Solar Power Europe and collaboration with Eurelectric on the Power Plant 2.0 report show that there are lots of inspiring examples of European corporate leadership and best practices for nature-inclusive investments, but there is also a clear remaining need for stronger, EU-wide policy coherence.
Our participation in the International Advisory Panel for Biodiversity Credits’ first report, launched at COP16 and co-sponsored by both the United Kingdom and France, underlines the critical importance of robust policy systems to ensure high integrity credits since, “high integrity at all levels is a prerequisite for scale, not a barrier to it”.
We are therefore calling for the EU Commission to introduce a common, EU-wide framework as a ‘foundation stone’ to enable the development of credible, effective and regulated Nature Markets in Europe. We believe such a framework is needed to equip and enable Member States to efficiently operationalise and scale nature credit schemes in their own countries, supported by a credible, unified set of scientific definitions and policy governance that should apply EU-wide. Our latest report, in collaboration with Metabolic, outlines why the EU needs a common certification framework for nature credits to ensure transparency and verifiable accountability for nature-positive investments.
A well-structured policy framework would harmonize efforts across EU Member States and foster collaboration, economic incentives and accountability while building greater confidence—among citizens, communities and investors—in how high-integrity outcomes can be delivered at national levels. At the same time, such a framework could also serve as a simplification mechanism to integrate well into existing EU policies for nature, climate, food, water, energy and other sectors pursuing sustainable development.
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We are therefore calling for the EU Commission to introduce a common, EU-wide framework as a ‘foundation stone’ to enable the development of credible, effective, and regulated Nature Markets in Europe.
Looking Ahead, From Foundation-Building to Funding and Financing
Our latest report showcases how policymakers can learn and take inspiration from relevant new schemes underway in places like the United Kingdom, Australia and also the EU Commission’s pilots in Estonia and France. More Member States are expected to explore how to integrate private sector funding into National Biodiversity Finance Plans. However, rather than advocating for any single implementation model, the EU should develop an enabling certification framework as a ‘foundation stone’ that Member States and other policymaking entities can then use for a possible range of implementation schemes.
There are multiple ways that a new, EU-wide nature certification framework could drive the development of nature markets in Member States. We can stretch our imaginations to envisage a growing range of possible market mechanisms and financing pathways which can collectively help to build healthy demand for nature credits, including blended finance models and the role of credit guarantees, fiscal incentives, subsidy reforms supporting more effective and equitable forms of payments for ecosystem services and a spectrum of other ‘smart policy’ alignments across the EU policy architecture.
Along with other stakeholders, we are exploring what a coherent package of potential monetization pathways could look like within the EU context and aim to share further ideas in due course.
Check our latest report with Metabolic
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