Industry needs carbon removals

  • The EU’s climate neutrality objective requires both deep emissions reductions and permanent carbon removals. Even with continued decarbonisation, sectors such as cement, steel, chemicals, aviation and shipping will continue to generate residual emissions that cannot be eliminated through existing technologies. Integrating high-quality, permanent carbon removals into the EU ETS would provide these hard-to-abate industries with a credible and scalable way to address their remaining emissions while creating the long-term demand signal needed to scale Europe’s carbon removals sector.

  • Carbon removals are not simply a compliance tool for achieving climate targets, but also create new commercial opportunities across a wide range of industrial sectors. In addition to purchasing removal credits, many existing hard-to-abate industries are well placed to generate removals themselves or form valuable partnerships across the carbon removals value chain. Steel producers can supply alkaline residues for mineralisation, pulp mills can generate removals through BECCS, and energy, chemicals and oil-and-gas companies can provide the infrastructure needed for CO₂ transport and storage. In the cement and concrete sector, CO₂ can be permanently mineralised into construction materials. Waste-to-energy facilities can capture and permanently store biogenic CO₂ emissions from organic waste, generating negative emissions. Biochar and enhanced rock weathering projects can provide farmers with a carbon removal revenue stream while improving soil health, water retention, and agricultural resilience.

    These integration models allow businesses to create new value from existing operations. By turning waste streams, industrial by-products, and existing infrastructure into valuable assets, carbon removals can open new revenue streams and strengthen industrial competitiveness. As decarbonisation requirements increase and demand for high-integrity removals grows, companies that begin building these capabilities early are likely to be better positioned than those waiting for a future compliance obligation to emerge.

  • Carbon dioxide removal has the potential to become one of Europe’s next major cleantech industries. By 2050, carbon removals could generate between €110 and €220 billion in economic value across the EU and support up to 670,000 highly skilled jobs in sectors such as engineering, manufacturing, energy, transport, and carbon management. Developing a competitive European carbon removals industry would strengthen the continent’s industrial base while creating new markets for innovation, investment, and clean technologies. Scaling the carbon removals sector can also support a just industrial transition. Many of the skills, infrastructure, and technical expertise found in today’s energy-intensive industries can be transferred to carbon removal value chains, helping workers and regions adapt as Europe’s economy decarbonises. By investing early in domestic carbon removal capacity, Europe can strengthen its competitiveness, create high-quality jobs, and ensure that the economic benefits of the net-zero transition remain within the EU.

 

Mainstreaming carbon removals in EU law

  • Emissions Trading System

    The Negative Emissions Platform (NEP) calls for the integration of permanent carbon dioxide removals (CDR) into the EU Emissions Trading System (ETS) through a phased approach. This would support the EU’s path to net-zero by creating long-term demand and revenue certainty for the CDR sector, while maintaining the environmental integrity of the ETS. NEP proposes starting with public funding and intermediary-led procurement, followed by gradual integration of certified permanent CDRs without increasing the ETS cap.

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  • EU Climate Law

    The EU Climate Law should be strengthened to support both climate neutrality by 2050 and the growth of a competitive permanent carbon dioxide removal industry. This means setting a 90% net emissions reduction target for 2040, alongside separate targets for gross emissions reductions, permanent CDR and LULUCF, backed by a broader support package beyond ETS integration. It should also include strong safeguards for any international credits and support a portfolio of permanent CDR methods to ensure consistency across EU policies.

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  • Green Claims Directive

    The Green Claims Directive proposed by the European Commission is crucial for combating greenwashing and promoting investment in permanent carbon removal. This directive would require companies to substantiate and communicate their environmental claims, including guidelines on using carbon credits.

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  • Making a short-term EU purchasing programme work for CDR

    Making a short-term EU purchasing programme work for CDR

    The EU should scale permanent carbon dioxide removal by 2030 through near-term support, including an EU Buyers’ Club, results-based payments for verified removals, and a pathway from a €1 billion pilot in 2026 to longer-term support through the Industrial Decarbonisation Bank. It should also make CDR visible in key EU funding instruments, support large-scale R&D through FP10, and secure long-term funding to strengthen competitiveness, jobs and climate goals.

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  • CDR in the Multiannual Financial Budget

    CDR in the Multiannual Financial Budget

    The EU budget will help decide which net-zero technologies scale in Europe, but carbon dioxide removal is still not clearly included in funding priorities. To protect competitiveness, jobs and climate goals, the EU should make CDR eligible in key funding instruments, support large-scale R&D through FP10, and secure long-term funding as negotiations move forward.

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