The EU’s Emissions Trading System (ETS), which is already in place, can be extended to incorporate carbon removals, says a study by the Potsdam Institute for Climate Impact Research (PIK).

The findings, which were published in the Journal Joule, looked at the incorporation of carbon removal technologies within the EU carbon market. The study found that up to 68 million and 86 million tons of CO2 per year could be removed using the system by 2050.

The EU ETS was launched in 2005 and covers emissions from sectors such as electricity production, industry, and aviation. The system involves setting emission caps and trading carbon allowances.

The study looked at the financial mechanisms related to carbon removal technologies such as direct air capture and bioenergy with carbon capture and storage (BECCS). Such technologies involve removing carbon dioxide from the atmosphere and storing it.

There were suggestions that firms engaged in carbon removal processes could be issued certificates that would be tradeable in the emissions market. This report analyzed the impact of such a mechanism on investments in carbon removal under existing climate policy.

It was also forecasted that carbon prices in the EU ETS could increase to approximately €400 per tonne until 2050, when they would stabilize.

A phased approach to the incorporation of removals into the trading scheme was suggested. It consisted of setting up monitoring and verification standards before gradually incorporating removals into the trading scheme. It was forecasted that more incorporation of removals and residual emissions would occur around 2040.

The issue of carbon removals is also discussed in relation to climate policy. Some experts are critical of reliance on removal technologies as opposed to emission reduction, whereas others consider them inevitable for reaching net-zero emissions targets.