The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS
A joint report from Clean Air Task Force and CONCITO analyses and provides recommendations to address potential impacts on 1) the functioning and integrity of the EU Emissions Trading System (ETS) and 2) short and long-term demand for permanent carbon removals, if permanent carbon removals are to be integrated into the EU ETS as part of the 2026 review of the system.
The report examines the integration of permanent carbon removals into the EU ETS through four approaches:
- Without restrictions
- With a maintained emissions cap
- With supply controls
- Via an intermediary institution
Assessment criteria focusing on cost-effectiveness, environmental integrity, market functioning, implementability, and fiscal impact have been developed to evaluate the four policy options. The report focuses solely on capture and storage of biogenic CO2 from power plants or industrial processes (BioCCS) and direct air carbon capture and storage (DACCS) in the base analysis due to their high permanence and robust monitoring, reporting, and verification (MRV). Biochar is included in a sensitivity analysis to better understand the effects of its possible integration in the EU ETS.
