Europe has painstakingly built the world's most sophisticated rulebook for carbon removal (CDR), but the market it's meant to govern is still finding its feet. It's a classic chicken-and-egg problem that policymakers know well—you need rules to ensure quality, but you need demand to justify investment in meeting those rules. This was the central challenge that brought together policymakers, researchers, and industry experts in Brussels last week for a workshop on developing a CDR purchasing program.
The question everyone was grappling with: how do we create enough demand to build a thriving industry? The proposed answer was a short-term EU purchasing program running from 2025-2030, designed to jump-start the market before CDR integrates into broader compliance mechanisms like the Emissions Trading Scheme (ETS).
Where are we now?
Any purchasing program will build on the EU's Carbon Removals and Carbon Farming (CRCF) regulation, the flagship regulation on carbon removals that came into force last year. This sets the floor for high quality carbon removal in Europe. The Commission is currently finalizing methodologies for Biochar, Bio-CCS and Direct Air Capture, as well as the rules for the supporting architecture: authorized registries (“certification schemes”) and validation and verification bodies (“certification bodies”).
Once this implementing detail is in place at year's end, Europe will have a fully functioning framework for carbon removal production—a major achievement. The EU has legislated skillfully—building on the architecture which has grown organically within the private sector. But, as always, there's more to do. Additional pathways like Enhanced Weathering (EW) and Marine CDR deserve inclusion given the need to scale CDR rapidly. The broader the portfolio, the more resilient the solution.
Where are we going?
Long-term, CDR must integrate into the EU ETS. Even under the most ambitious decarbonization scenarios, key ETS sectors—like cement, steel, and aviation—will generate residual emissions that are technically or economically impossible to eliminate entirely.
The European Commission is currently consulting on the ETS's future, including CDR integration. The ETS offers one of our most promising tools for scaling CDR from today's nascent state to a gigatonne industry. In 2023 alone, the EU ETS generated over €43.5 billion in auction revenues. Put that in perspective: just one-fifth of 2023's ETS auction revenue exceeds all CDR ever ordered1. That's serious potential scale.
But there's a problem in the near term. A significant price gap exists between EU allowances in the ETS and CDR costs. EU allowances averaged €65 in 2024, while engineered CDR costs between €150- €500+. Direct integration isn't economically viable today. Prices need to converge for ETS integration to drive meaningful demand and this will take several years.
How do we bridge the gap?
The workshop focused on policy interventions that could rapidly generate demand and bring CDR down the cost curve. Three proposals were the focus of discussions: an EU coordinated Buyers Club, an EU Removals Fund, and a Centralized Procurement Agency. Each represents a different model of public-private collaboration, but all share the same goal—closing the price gap through scale and strategic purchasing.
The emphasis was firmly on speed over perfection. In that context, leveraging existing institutional structures like the EU Innovation Fund as delivery mechanisms makes perfect sense—why reinvent the wheel when you can turbocharge what already works?
Crucially, there was also discussion of building a diverse portfolio approach to CDR purchasing. Rather than betting everything on one or two technologies, smart procurement can spread risk across multiple pathways, including Enhanced Weathering and Biochar. These pathways are among the most cost-competitive today and show real promise for converging with ETS carbon prices. Biochar, for instance, is currently listed at $150 per tonne on the CDR.fyi price index2.
The question now is whether Europe can move quickly enough to maintain its regulatory lead while building the market to match. Two critical steps need to happen alongside these demand-side interventions. First, rapidly expand CRCF's scope to cover other promising removal pathways, such as EW. Second, ensure ETS integration is open to all removal methodologies covered by CRCF, rather than narrowing focus to just Bio-CCS and Direct Air Capture (as is being considered in the current consultation).
EU policymakers are understandably cautious about ETS integration—this is, after all, the flagship EU climate policy. But Europe has already demonstrated through CRCF that it can develop robust, rigorous rules for carbon removal. The challenge now is weaving these different policy strands together—CRCF, ETS, and the purchasing programs—into a coherent strategy that can scale at the speed climate demands.
My trip to Brussels made one thing clear: with planned purchasing programs, Europe now has all the pieces of the puzzle. The question is whether it will assemble them quickly enough to scale carbon removal at the speed the planet needs.
1. $6.49 billion spent on CDR according to CDR.fyi, as of 5/27/25
2. CDR.fyi price index lists Biochar at $150 per tonne, as of 5/27/25
