Capture of biogenic CO2 with technologies is key in helping the EU achieve a sufficient cut in net greenhouse gas emissions by 2040. To achieve this, two key barriers need to be removed in EU policies. Firstly, technological carbon dioxide removal solutions need to be recognised in EU’s trading schemes. Secondly, biogenic CO2 must be acknowledged and prioritised when the EU develops its infrastructure to transfer and process CO2. 

The European Union will soon start debating the new climate target for 2040. The Commission is expected to present the 90% emissions reduction from 1990 levels in the coming months. The impact assessment of the Commission for the target presented a year ago already showed the vast scale of investments needed. For example, the use of clean hydrogen would need to grow tenfold and the use of synthetic e-fuels 18-fold between 2030 and 2040. Recently, it has also been revealed that the EU is further away from its targets in the land-use sector as earlier thought: while the target for 2030 is a natural carbon sink of 310 MtCO2, the current level is only around 200 MtCO2.  

– The recent trends in EU’s climate performance suggest an increasing role for capture of biogenic carbon dioxide and technological carbon removal. They are by no means silver bullets, but in any case, crucial tools to achieve the targets and to get rid of fossil fuels. They also fit well into a circular bioeconomy, says Harri Laurikka, Managing director of the Bioenergy Association of Finland. 

Europe’s most important climate policy instrument is the EU emissions trading scheme (EU ETS, ETS1) that has been operating since 2005. In addition to the EU ETS, a new emissions trading system covering CO2 emissions from fuel combustion in buildings, road transport and small industry (ETS2) was agreed in 2022. ETS2 will become fully operational in 2027. 

– Emissions trading schemes are promising bases for technological carbon removal in EU regulation. They leverage private capital for investments and are already familiar instruments for market participants. In the EU ETS, there is a functioning and liquid secondary market. Removal quantities can also be controlled and adjusted to prevent undesired market impacts, notes Erika Laajalahti, Sector Manager for Carbon removal & CCUS at the Association. 

In the current EU ETS, carbon capture and storage is recognised if fossil fuels are used. Installations using sustainable biomass and capturing and permanently storing the carbon do not get a reward for the removed CO2 in EU’s compliance-based markets. There are some examples of successful permanent removal projects related to biochar production and projects capturing biogenic CO2 and permanently storing it in the construction phase in the EU. These projects are at the moment based on off-take agreements in the voluntary market, state aid schemes and, in many cases, EU-funding.  

The EU Commission has recently launched a public consultation for further development of the EU ETS. The consultation evaluates the possible inclusion of domestic permanent carbon removals in the EU ETS or other policies, setting a clear scope and strict criteria, as well as safeguards to ensure that such removals do not offset necessary emissions reductions. The consultation is open until July 8th.  

Further information:
Harri Laurikka, Managing Director, 040 1630465, harri.laurikka@bioenergia.fi
Erika Laajalahti, Sector Manager, Carbon removal & CCUS, 044 753 0700, erika.laajalahti@bioenergia.fi