Commission proposes to integrate permanent carbon removals into the EU ETS
Proposed
The European Commission tabled its EU ETS revision. It raises the cap by 250 million allowances over 2031 to 2040, auctioned so the revenue centrally buys BioCCS and DACCS certified under the CRCF Regulation. The purchased removals back up the extra allowances rather than entering the ETS directly, with a 10 million allowance contingency reserve. The proposal also slows the cap decline (linear reduction factor 3.7% for 2031 to 2035, then 1.7%) and lets in up to around 2% Article 6 international credits from 2036. It still needs European Parliament and Council agreement, expected to conclude around Q1 2027.
Context: For buyers this is the demand signal that matters most. It turns the EU itself into a large, structural buyer of CRCF-certified permanent removals alongside the Buyers' Club, and is the clearest move yet from a voluntary CRCF market toward compliance-linked demand. Read the headline number carefully: it is 250 million allowances, not 250 Mt of removals. The proposal binds the EU to auctioning those allowances and spending the revenue on an equivalent amount of permanent removals, not to a fixed tonnage. How much CDR that actually buys depends on the price gap between allowances and removals in the 2030s, and could be materially less than 250 Mt. Further caveats: it is only a proposal, the volumes run from 2031, and it covers permanent removals (BioCCS, DACCS), not carbon farming. One detail worth watching: the programme would buy only BioCCS and DACCS, not biochar, even though biochar has a CRCF methodology in force. The Commission's impact assessment concedes biochar generates permanent CRCF units and is the most deployment-ready option, but cites thin long-term research and the market effect of its lower cost.