In light of the publication of a new position paper on carbon dioxide removal (CDR) integration in the EU’s Emissions Trading System (ETS), this week, the Carbon Capture and Storage Association (CCSA) hosted an online panel on this topic, engaging in discussions with relevant sector stakeholders.
The online event, moderated by CCSA EU Policy Manager Alberto Sánchez Miravalles, saw participation from leading market players, including Drax’s Head of Policy and Public Affairs Kasia Wilk, CONCITO’s Lead on Emissions Trading and Carbon Removals Martin Birk Rasmussen, Chris Sherwood, who is the Secretary-General at the Negative Emissions Platform, as well as CCSA EU Director Thierry Grauwels.
During the panel, the speakers shared their thoughts and perspectives around the integration of CDR into the EU ETS framework and its role in stabilizing the EU carbon market and delivering climate neutrality by 2050.
The discussion was kicked off by Thierry Grauwels, who underlined the CCSA’s support for carbon removal, noting the need for a reliable framework to scale this vital climate field in a timely manner.
He stressed the importance of financial incentives, like subsidies, that have the power to unlock a rapid and large-scale CDR development.
According to the CCSA, in order for CDR to be included in the EU ETS, the carbon removal field needs to establish rigorous performance criteria for the different CDR technologies, and the criteria needs to be verifiable to enable credible accounting.
The CCSA also calls for differentiated allowances that would separate traditional ETS from permanent CDR credits and maintaining the EU ETS cap, with no inflation of the gross cap or influence on its downward trajectory in the short term.
To enter the EU ETS, CDR also needs a supply and demand management through an intermediary authority, preventing price spikes and supporting the development of a credible long-term market.
On behalf of the Negative Emissions Platform, an organization that advocates for CDR advancement across Europe, Chris Sherwood conveyed his and his team’s approval of the EU’s intention of including carbon removal in its ETS.
While to them this motion represents a move in the right direction, Sherwood stressed that the ETS doesn’t cover all the CDR sectors, and it doesn’t include historic emissions, meaning the ETS framework alone won’t be enough to rapidly scale CDR to larger proportions.
He brought attention to the need for an additional framework that would cover the CDR that doesn’t match the requirements of the EU ETS, mentioning the current patchy CDR policy landscape in Europe and calling for a clearer, more unified European decarbonization strategy.
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Speaking as a representative of BECCS-centered company Drax, Kasia Wilk highlighted that the inclusion of CDR in the EU ETS would help establish predictable, long-term demand for carbon removal suppliers active on the market like Drax and its subsidiary Elimini.
According to her, the integration would also help Europe construct a firmer strategy on addressing residual emissions from hard-to-abate sectors.
When considering the CDR integration, Wilk points to the importance of the conditions under which it will happen, pointing to the need for various components like rigorous MRVs and a clear differentiation between removals and allowances for maintaining the credibility of the ETS.
She goes on to add that the initial CDR ETS integration would also need to be reviewed from time to time to ensure it stays in alignment with the EU’s efforts towards net-zero goals.
Wilk noted that ETSs are currently more affordable than high-quality permanent removal, which might influence buyers to opt in for the more budget-friendly option. She conveyed the idea that this issue could be tackled through demand-side measures like quotas, price floors, or other similar mechanisms.
Lastly, she stated that they would support a model in which the European Commission or other intermediary authority acts as a CDR buyer that auctions the carbon removal into the ETS. From her company’s point of view, this would be the best model to really support early-stage projects and shield developers from the price fluctuations in the ETS.
CONCITO’s Martin Birk Rasmussen called for a careful and gradual CDR integration, agreeing with most of the aforementioned safeguards and key points raised during the panel discussion.
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Having assessed the topic of CDR ETS integration in his work previously, the one thing Rasmussen expressed concern about is the fact that in the case, for example, of biomass-based permanent CDR, the carbon negativity effect is not accurately reflected in the current EU monitoring and reporting frameworks since when biomass is burned and then captured, the accounting is decoupled from what happens in the land/forest sector (LULUCF).
His organization’s view, which Rasmussen points out has also been shared as a recommendation by the European Scientific Advisory Board, is that CDR needs pricing mechanisms in place that would reward CO2 sinks and price the emissions in the land sector or through other regulation of the biomass use.
If an effective system cannot be set up, the field will need some kind of quantitative limits or restrictions under the EU ETS.
Rasmussen also shared that going forward, in early October 2025, CONCITO and Carbon Gap will publish new reports that delve into the subject of compliance options for permanent carbon removals.
