Nature Credits: Europe’s Next Financial Crime Blind Spot

In a guest commentary for RUSI, Albertus Geldenhuys argues that the European Commission’s plans for a nature credits market have not yet considered financial crime. The Commission’s 2025 roadmap deals with greenwashing and double counting but does not address fraud or money laundering, or say who in the market must carry out customer due diligence.

He draws on the EU carbon market’s history of VAT fraud, registry breaches and late application of AML safeguards, and on Interpol’s typology of carbon market crime, arguing that nature credits are, if anything, more exposed. Outcomes are hard to verify independently, and payments flow to landholders in regions where environmental crime is already present. Banks see only a lawful purchase; the real vulnerability lies with brokers, registries and verifiers.

Recommendations include making brokers, registries and verifiers of EU-recognised credits obliged entities under the AML Regulation, building identity, beneficial ownership and sanctions checks into registries before credits are recognised, and completing a financial crime risk assessment before the governance rules due in 2027. The author declares a commercial interest in the verification field.

Article Credit: https://www.rusi.org/explore-our-research/publications/commentary/nature-credits-europes-next-financial-crime-blind-spot