The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS

The report evaluates the integration of permanent carbon removals—specifically BioCCS and DACCS—into the EU ETS. It identifies a critical tension: while direct integration can drive deployment and maintain market liquidity as the emissions cap approaches zero, it risks 'abatement deterrence' where removals substitute for necessary emissions reductions. The authors warn that without supply controls, BioCCS deployment could exceed sustainable biomass limits, potentially harming biodiversity and LULUCF carbon sinks. To mitigate these risks, the report recommends a gradual integration strategy that maintains the gross emissions cap, implements technology-specific supply controls, and introduces differentiated allowances. It also emphasizes that the EU ETS alone is likely insufficient to incentivize high-cost technologies like DACCS or to achieve net-negative emissions post-2050, necessitating additional public funding tools and long-term policy frameworks.

• Direct integration of permanent carbon removals without restrictions risks causing 'abatement deterrence,' where companies substitute emissions reductions with removals, leading to an increase in gross emissions within the EU ETS.
• The EU ETS allowance price is likely insufficient on its own to drive the early deployment of Direct Air Carbon Capture and Storage (DACCS) due to the high cost of the technology, which would require additional public funding or voluntary market support.
• Unrestricted integration of BioCCS could lead to unsustainable biomass use that exceeds the European Commission's 2040 climate target projections, potentially negatively impacting biodiversity and the LULUCF sector.
• Maintaining the gross emissions cap during initial integration—where one traditional allowance is removed for every removal allowance added—effectively prevents abatement deterrence and preserves the incentive for decarbonization.
• Integrating biochar into the EU ETS could amplify risks of abatement deterrence and sustainability issues due to its relatively low technology costs and reliance on biomass resources, potentially crowding out BECCS deployment.
• An intermediary institution could manage the integration of removals through procurement and a 'carbon removal pool,' but its political feasibility is low due to the requirement of delegating governance powers.
• Integration into the EU ETS is insufficient to achieve economy-wide climate neutrality or the EU's post-2050 net-negative emissions commitment without additional obligations or a net-negative emissions cap.
• The report recommends a combination of safeguards for integration: maintaining the gross emissions cap, implementing supply controls on removal methods, introducing differentiated allowances, and establishing a review clause.

APA

Clean Air Task Force (2024). The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS. https://cdn.catf.us/wp-content/uploads/2024/11/26174743/carbon-removals-eu-ets.pdf

Chicago

Clean Air Task Force. The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS. 2024. https://cdn.catf.us/wp-content/uploads/2024/11/26174743/carbon-removals-eu-ets.pdf.

Wikipedia

{{cite report |author=Clean Air Task Force |title=The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS |date=December 2024 |url=https://cdn.catf.us/wp-content/uploads/2024/11/26174743/carbon-removals-eu-ets.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cleanairtaskforce2024balancing, author = {{Clean Air Task Force}}, title = {{The Balancing Act: Risks and Benefits of Integrating Permanent Carbon Removals into the EU ETS}}, institution = {Clean Air Task Force}, year = {2024}, month = dec, url = {https://cdn.catf.us/wp-content/uploads/2024/11/26174743/carbon-removals-eu-ets.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }