EU Hopes to Boost Permanent Carbon Removals With New Purchasing Programme

With ambitions to achieve climate neutrality, the European Commission’s Directorate-General for Climate Action (DG CLIMA) is exploring a dedicated EU-wide purchasing programme to increase permanent carbon dioxide removals (CDR).

The programme hopes to increase demand, accelerate technological development, and drive investment into a market that is currently underdeveloped but key for meeting the EU’s long-term climate targets.

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Permanent carbon removal methods, such as direct air capture and storage, biochar, and enhanced weathering, are the most essential tools for removing CO₂ from the atmosphere and storing it for centuries or longer. While these technologies hold promise, their deployment across Europe remains limited, primarily due to insufficient demand and uncertain revenue streams.

To address this, DG CLIMA is assessing policy options that could create a robust demand signal and lower the risk for private investment. One of the main features under consideration is an EU-wide purchasing programme that would buy permanent CDR credits, offering predictable returns to early movers and helping the market mature.

Strategic purchasing for market development

A newly published report, “An EU Purchasing Programme for Permanent Carbon Removals,” provides an in-depth analysis of how one of these mechanisms could be structured in the short term, particularly between 2025 and 2030.

The report recommends a planned approach to purchasing, rather than simply buying the cheapest credits available, by selecting from a variety of removal types and technologies to ensure market diversity and long-term innovation.

To fund this programme, the report suggests pooling resources from multiple sources, including the EU budget, national contributions from Member States, and private capital. It also emphasises the importance of aligning the new programme with existing EU initiatives, such as the Innovation Fund, to reduce administrative complexity and improve attractiveness for project developers.

The EU’s CDR landscape

Two accompanying studies offer a deeper understanding of the current state of carbon removals in Europe. The first, Carbon Removals in the EU: Review of Current Carbon Removal Projects and Early-stage Financing, maps ongoing and planned CDR projects through 2035. It also outlines technology readiness levels, funding gaps, and key barriers to deployment. The study identifies a clear need for early-stage support, especially for emerging technologies that could become viable at scale with the right backing.

The third report, Carbon Removals in the EU: Assessment of Existing EU Funding Programmes and New Funding Models to Increase Carbon Removal Supply, reviews existing financial support systems like Horizon Europe and the Innovation Fund. While these programmes already offer some support to CDR companies, the report argues they need to be supplemented with new, innovative funding models that can de-risk early investment and support scale-up.

Among the options being explored are advance market commitments, blended finance instruments, and outcome-based funding, all aimed at creating a more attractive ecosystem for both technology developers and investors.

Climate neutrality

These reports show a clear step forward in shaping the EU’s approach to permanent carbon removals. By laying the groundwork for a centralised purchasing programme and aligning policy tools, DG CLIMA hopes to create the necessary momentum to transition from pilot projects to full-scale deployment.

As Europe advances its Green Deal ambitions and works towards achieving net-negative emissions in the coming decades, initiatives like this purchasing programme could be key in bridging the gap between climate targets and real-world implementation.