EU Commission faces backlash over ETS carbon removal plan
- The EU proposes integrating 250 million tonnes of permanent carbon removals by 2040.
- WWF warns the proposal is incompatible with the EU's 90% emissions reduction target.
- Critics argue the plan relies on flawed accounting and could weaken carbon price signals.
- CATF supports the integration but insists on strict safeguards for geological storage technologies.
- Experts suggest developing carbon removal frameworks outside the existing ETS architecture.
The integration of these removals into the EU Emissions Trading System is considered a highly significant design decision.
WWF warns proposal threatens 2040 climate targets
Eubusiness.com reported the proposal is incompatible with the 2040 climate target.
The proposal would increase the supply of ETS allowances by up to 10% above projected demand.
Critics label integration as flawed accounting
According to eubusiness.com, the Commission's proposal could create a "lose-lose situation" where neither emissions reductions nor permanent carbon removals are achieved.
The Commission proposes allowing additional emissions beyond the current cap despite concerns that the necessary capacity does not exist and that costs will likely remain higher than the carbon price.
CATF supports integration with strict technology safeguards
This follows the establishment of the EU Carbon Removal and Carbon Farming framework under Regulation (EU) 2024/3012.
CATF and Concito examined the challenges of integrating carbon removals into a cap-and-trade system in a 2024 report. CATF advises against replacing permanent carbon removal units with temporary methods like biochar, citing material risks of reversal and monitoring difficulties.
Biochar carbon removal should be excluded from the EU ETS because it lacks the necessary safeguards, even if it is considered permanent under the CRCF methodology. Only permanent removals with established regulatory architecture for geological storage, such as DACCS and BioCCS, should be eligible for purchase within the EU ETS.
Economic projections for carbon prices and cost gaps
Projections based on the Commission’s proposal suggest the EU ETS carbon price could remain below €200/t in 2040.
In a scenario where the carbon price reaches €300/t in 2040, a mixed portfolio of removal technologies generates a deficit of €20.9 billion, requiring 95 Mt of allowances at average prices to cover costs.
ETS integration requires supporting policies such as public procurement, reverse auctions, or carbon contracts for difference to bridge cost gaps for technologies like DACCS.
Development status of BioCCS and DACCS projects
Technology provider RepAir is working with storage developers in France and Greece to scale DACCS projects toward Mt-scale in the 2030s.
In Norway, two DACCS projects are scaling their operations to 100 and 500 kt per year. There is an urgent need to advance these carbon removal projects in the near term, as many are in advanced stages of development but currently lack a business case, according to CATF on 6 November 2026.
Proposed regulatory adjustments and future reporting
Under Article 9c (8), the Commission is due to publish a progress report in 2034 to assess the purchase of domestic permanent carbon removals. This report will also evaluate the potential role of nature-based removals and carbon farming.
CATF advises that the ETS revision should include a mechanism to source additional revenue if a funding shortfall is projected in this 2034 report. Potential revenue for permanent removals could be sourced by auctioning additional allowances between 2036 and 2040, including unallocated free allowances from hard-to-abate sectors under Article 10a(3).
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