Permanent carbon dioxide removal (CDR) is a necessary climate tool that the EU will need to utilise to reach climate neutrality and net-negative emissions. But mitigation deterrence is a key issue: removals should not lead to a slowdown of emission reduction efforts and results. CDR must complement, not substitute, emission reductions.
However, the European Commission’s July 2026 EU Emission Trading Scheme (ETS) proposal falls short of these basic principles. Integration of removals in the ETS is undertaken to enable more emissions, rather than to scale up the CDR sector.
Key safeguards in existing legislation meant to limit the use of removals for hard-to-abate emissions in both the ETS Directive (Article 30(5)a) and the EU Climate Law (Article 4(5)b) are completely ignored by the ETS proposal.
The policy proposal builds upon key, untested assumptions that contradict scientific assessments of CDR. First: CDR and greenhouse gas emissions can be deemed equivalent. Second: CDR will become relatively cheap, reaching near price parity with ETS emission permits in the coming decade. Third: CDR will be relatively abundant, with 250 million tonnes of CDR delivered by 2040.
To make matters worse, the proposal relies on the Carbon Removals and Carbon Farming (CRCF) framework, which is currently ill-suited to certifying real removals, especially from BioCCS.
Rather than allowing more emissions to fund removals, the ETS should dedicate funding to scale up the CDR sector. ETS revenues can play a crucial role to contribute to a separate EU permanent removals target, while the ETS itself remains laser-focused on reducing emissions.
