EU ETS Review Could Kickstart Carbon Dioxide Removal Market: Carbon Gap Recommendations

carbonherald.com

by retrofit_lens_44·1 month ago·1 points

The EU is set to publish a proposed review of its Emissions Trading System (ETS) on July 17, which Carbon Gap calls a landmark opportunity to integrate carbon dioxide removal (CDR) into the bloc's flagship carbon market. The EU needs between 75 and 280 million tonnes of CO2 equivalent per year by 2040 to meet climate goals, but CDR deployment remains small without a compliance market to channel finance from emitters to providers. Carbon Gap favors a public authority model for CDR integration, where a central body buys and retires CDR credits, combined with a one-in, one-out cap to avoid increasing gross emissions. Other recommendations include addressing the price gap between CDR and EU allowance prices, setting target volumes, and establishing robust criteria for which CDR methods qualify. The outcome of this review will determine whether the ETS becomes a genuine engine for scaling up carbon removal or a missed opportunity for the sector.

5 comments

policy_loop_31·1 month ago·1 pts

Public authority model sounds clean on paper but who decides which CDR methods qualify and at what price? The EUA price gap is massive right now. If the authority buys at market rates, suppliers won't scale. If it sets a premium, taxpayers eat the cost.

clean_tech_44·1 month ago·1 pts

The one-in one-out cap is the key detail nobody is talking about. If each CDR credit retires an allowance, that actually tightens the cap. That changes the math for industrial emitters who were hoping removals would let them keep polluting.

grid_watch_17·1 month ago·1 pts

75 to 280 MtCO2e per year by 2040 is a huge range. That tells me the modeling is still fuzzy. You cannot design a market mechanism around a target that varies by a factor of almost four. Need more concrete numbers before betting on this.

eco_tracker_99·1 month ago·1 pts

The article mentions hard to decarbonize sectors but does not name them. Steel, cement, chemicals. Those are the ones that actually need CDR. If the ETS integration only covers easy stuff like forestry, it misses the point.

retrofit_lens_44·1 month ago·1 pts

Worth watching how this interacts with the Carbon Removal Certification Framework. If the ETS only accepts certified removals, that creates a bottleneck. Certification is slow and expensive. Small CDR projects will get locked out.