On Thursday 21 August, the European Commission’s Directorate-General for Climate Action (DG CLIMA) published three studies carried out by Ramboll Management Consulting and the Ecologic Institute on permanent carbon dioxide removals. The aim of this work is to explore the possibilities of designing a European programme for financing and purchasing permanent carbon removal credits.
The studies point out that the European Union would need to rapidly increase permanent CO2 removals to achieve the climate neutrality expected for 2050, while current demand remains too low for the large-scale development of carbon elimination technologies.
The report ‘An EU Purchasing Programme for Permanent Carbon Removals: Assessment of Policy Options and Recommendations for Short-term Policy Design’ (https://aeur.eu/f/i78 ), which analyses different models for a European purchasing programme for carbon removal credits, recommends, for the period 2025-2030, the establishment of a purchasing mechanism at EU level, combining a centralised facility or fund, a joint procurement system and a ‘buyer group’ coordinated by the European Union.
According to estimates, reaching the target of 5 MtCO2 of annual industrial withdrawals in 2030 would be possible thanks to an investment of between €2.4 and 6.7 billion.
The second report, ‘Carbon Removals in the EU: Review of Current Carbon Removal Projects and Early-stage Financing’ (https://aeur.eu/f/i79 ), lists existing and current projects up to 2035. It details the main technologies (biochar, bioenergy with carbon capture and storage, direct air capture, in situ and ex situ mineralisation, ocean approaches), assesses their costs and level of technological maturity, and identifies future withdrawal capacities.
The study suggests that current permanent withdrawals, estimated at 1.3 MtCO2 per year worldwide, represent only 1.3% of the volumes needed for the EU by 2050.
The third report, ‘Funding EU Carbon Removals: Assessment of Existing EU Funding Programmes and New Funding Models to Increase Carbon Removal Supply’ (https://aeur.eu/f/i7j ), identifies and examines existing financial instruments, such as the Innovation Fund, Horizon Europe or LIFE, and proposes ways of supporting the development of carbon removal.
Contracts for difference, green bonds, public-private partnerships and dedicated investment funds are the main possibilities put forward. It is therefore recommended that public and private funding be combined and that funding programmes be made more accessible to project sponsors. (Original version in French by Nithya Paquiry)