EU Commission Considers Trading Captured CO2 as Commodity

A leaked European Commission document, set for release on February 6, reveals plans to revolutionize industrial carbon management. This ambitious proposal aims to recycle captured carbon dioxide in chemical processes and utilize it as fuel for maritime and jet engines. The document highlights the EU’s intention to account for non-emitted CO2 within its carbon market, signaling a significant shift in how carbon emissions are handled.

The Commission’s vision is to establish a European single market for industrial carbon management, crucial for achieving net-zero emissions by 2050. The policy outlines the need for the EU to capture at least 50 million tonnes of CO2 annually by 2030, scaling up to 450 million tonnes by 2050. This strategy targets residual emissions from sectors like agriculture, transport, and industry, which are less likely to fully decarbonize by 2030.

Beyond 2050, the focus shifts to achieving negative emissions through direct atmospheric carbon removal methods. The paper sets a clear end goal: transforming CO2 into a tradeable commodity akin to oil or wheat. This vision involves establishing regional carbon value chains, supported by an EU-wide infrastructure, including pipelines for the cross-border transport of captured CO2.

The Commission proposes integrating carbon removal technologies into the EU Emissions Trading Scheme (ETS), which already allows for the non-surrender of allowances for permanently captured and utilized CO2. The policy also suggests exempting low-carbon fuels, such as green hydrogen, from surrendering allowances to prevent double counting of embedded carbon.

Environmental organizations support carbon capture and utilization in principle but express concerns regarding the proposal’s execution. They emphasize the importance of ensuring the environmental integrity of carbon utilization techniques, particularly the permanence of stored CO2. Carbon Market Watch, a green NGO, warns against potential loopholes in the EU ETS, advocating for a separate mechanism to ensure high-quality, sustainable, and permanent carbon removals.