Strategy for the Financing of Permanent Carbon Removals

Achieving the EU's goal of climate neutrality by 2050, and net-negative emissions thereafter, will require large-scale deployment of carbon removals with permanent storage. However, many of these prospective technologies, such as Direct Air Carbon Capture and Storage (DACCS) and Bioenergy with Carbon Capture and Storage (BECCS), remain expensive and are at early stages of maturity. To support their development, there is an urgent need for early stage financing and the promise of long-term demand for high quality permanent removals.

This project will support the European Commission's DG CLIMA to develop policies related to the financing of permanent carbon removal technologies, with an emphasis on mechanisms that can accelerate their upscaling. These include tools like public procurement, public-private partnerships, and EU funding instruments.

• Task 1 reviews the current landscape of carbon removal technologies and identifies early-stage funding opportunities. It maps existing projects and explores how EU funding programs can be enhanced to support the scaling of carbon removal initiatives.
• Task 2 develops policy options to stimulate long-term demand for permanent carbon removals. It focuses on designing a public purchasing program for high-quality removals and explores the potential impacts of integrating CDR into the EU Emissions Trading System (ETS), as well as other policies for upscaling demand.

Ecologic Institute leads Task 2, taking a central role in exploring policy options such as public procurement and ETS integration. In addition, Ecologic Institute will produce a policy discussion paper outlining options for incentivising carbon removals post-2030. Ecologic Institute will also be involved in the research for Task 1 and is responsible for organising two stakeholder workshops (one for each task), bringing together industry leaders, project developers, and policymakers to provide input for both tasks.