🇪🇺 Could carbon removals save the EU ETS?

Europe’s flagship climate policy - the EU ETS - has come under heavy attack lately. Its cost on carbon is seen as unsustainable and unfair to European industry.

⚠️ As a result, member states are asking for changes, delays, and even suspension.

🤔 But could CDR be a solution here?

📈 First, let’s start with the status quo: the cost of carbon in the ETS is going to increase - by design: estimates put it at around €150/t in 2030, €200/t in 2035, €270/t in 2040 and >€600/t in 2050.

💀 This would be a death sentence to European industry. 

⁉️ As a result - which is what we are seeing already - ad hoc changes to caps, prices, etc are usually suggested, creating instability and uncertainty.

💱 In a cap-and-trade system approaching net zero, the marginal compliance cost is determined by the most expensive unit of abatement. CDR introduces a new, more affordable compliance option - thereby creating a cost-ceiling above which the ETS price will not soar.

🫰 According to Sultanti et al (2024), CDR could yield a 10-15% reduction in ETS costs in the 2030s, and >50% post 2050. Verbist et al (2025) also show up to 50% savings, depending on the integration design.

🪨 And this is with DACCS and BECCS only. Including Biochar Carbon Removal (BCR) or other more affordable technologies, would increase this effect even further!

🤯 Joel Gould (2025) estimates total cost savings of up to €37b/year by 2050 with a CDR portfolio cost of €150/t.

💲 So can CDR save the ETS? No, if we cannot accept a cost of even €150/t in the 2030s. In that case, I frankly see no future for it. 

⛴️ But for those - and there are many across the EU - who do believe in a future for the ETS, especially once the CBAM is fully functioning, CDR could help defuse fears of costs spiralling out of control.

⬇️ This, however, will only work if we make sure that the portfolio cost of CDR itself remains as low as possible, requiring a technology neutral integration, ensuring that more affordable approaches are part of the solution alongside DACCS and BECCS.

🙋🏻‍♀️ What is your take? Do you agree with this assessments or any major flaws?

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