Launching an EU framework for permanent carbon removals financing

Background Information

To successfully tackle climate change, urgent and ambitious emissions reductions  remain critical. Complementing this, there is a need to support the development of a sustainable carbon dioxide removal (CDR) capacity to balance out limited residual emissions and achieve and maintain net negativity.

In the EU, currently, financing for removals is focused on voluntary initiatives in the voluntary carbon market and on the potential expansion of the EU Emissions Trading System. The latter was included in the European Commission's proposal for a 2040 climate target to amend the European Climate Law. Both options carry the risk of slowing down emissions reduction efforts and favouring cheaper CDR methods with limited or no climate and environmental integrity.

In 2025, a coalition of stakeholders from academia, civil society, and industry examined alternative policy instruments for testing and scaling high-quality permanent removals in the EU. Together, they co-created a prototype for an EU CDR Financing Framework, addressing the short-, medium-, and long-term financing needs and principles for permanent removals.