Investments in renewables reached $2 trillion in 2024, a 70% increase over the last decade. This progress is remarkable, but it’s not enough. The world is awakening to an uncomfortable truth: at current emissions levels, scientists warn the world could exhaust the remaining carbon budget for 1.5°C within about three years. This could put the goals set out in the Paris Agreement beyond reach unless emissions fall sharply and carbon removals scale significantly.
At the same time, global energy use is climbing. In 2024 alone, demand rose 2.2%, outpacing the previous decade’s 1.3% annual average. This trend is accelerating faster across some sectors – for example, electricity demand from data centers globally is projected to more than double by 2030. Even as renewable capacity expands, clean energy demand is growing faster than supply can keep up.
To meet this moment, we urgently need to scale up carbon dioxide removal (CDR) – particularly permanent removals – to bring atmospheric CO₂ levels back within safe limits and balance out emissions from hard-to-abate sectors. They are a crucial tool to complement, not replace, deep and rapid emissions reductions.
Europe is helping lead the way. With the development of the Carbon Removal Certification Framework (CRCF), potential integration of CDR into the EU Emissions Trading System (EU ETS), and exploration of a public purchasing programme, the continent is building the foundation for a trustworthy and scalable removal market.
The bloc is now uniquely positioned to catalyze growth – creating a landscape that’s rich in policy support and gives growing confidence that the CDRs businesses purchase are credible and high quality.
Driving Credibility in Europe: The Carbon Removals and Carbon Farming Certification (CRCF) Regulation
The CRCF, which came into force in December 2024, represents a milestone in strengthening CDR credibility in Europe. Through a common standard for how removals are quantified, monitored, reported and verified, it provides buyers certainty and signals political backing for the sector.
Where unfamiliarity and reputational risk once hindered CDR investment in the VCM, businesses will soon be able to invest with greater confidence that the removals they purchase are aligned with science-based, policy-backed standards.
For carbon markets to thrive and grow further, emerging standards must continue to be grounded in scientific and business reality. This means embracing a diverse set of credible technologies.
In November, the EU’s Carbon Removal Expert Group met to discuss proposed draft delegated act with certification methodologies for permanent removals, including Direct Air Capture with Carbon Storage (DACCS), Biogenic Emissions Capture with Carbon storage (BioCCS) and Biochar Carbon Removal (BCR) - that the Commission is now planning to adopt before the end of the year. The EU’s leadership on this matters – not just for Europe, but globally. Robust methodologies can serve as a blueprint for others and help shape climate markets around a shared standard.
The Role for the EU ETS
The EU ETS – the Union’s carbon market, which is designed to reduce greenhouse gas emissions by setting a limit on emissions for certain sectors of the economy – has been effective in driving emissions reductions. However, some hard-to-abate sectors are experiencing mounting pressure to decarbonize in the face of rising carbon prices and a tightening of free allocation under the EU ETS.
The reality is that even with aggressive emissions reductions, some sectors will continue to produce residual emissions. As the EU strengthens its ETS with a tighter cap, Europe must also develop a clearer strategy to manage these residual emissions.
Encouragingly, the European Commission will assess by July 2026 whether and how permanent carbon removals could be integrated into the EU ETS. Integrating high-integrity CDRs will help bridge this policy gap and send a strong sign of intent and confidence in durable removals – which are essential to building a robust, scalable and commercially viable CDR industry in Europe.
Project and Policy Momentum
We’re already seeing promising momentum for removal projects in Europe. In Sweden, work is underway to construct Beccs Stockholm, led by Stockholm Exergi, a project which aims to develop the capacity to capture and store more than 800,000 tonnes of CO₂ annually at the company’s existing heat and power biomass plant.
Additionally, Elimini and HOFOR, Copenhagen’s public utility, recently announced a strategic agreement to develop a large-scale BECCS facility at the Amagerværket power station, one of Denmark’s largest point sources of biogenic CO₂.
The project aims to create a BECCS value chain capable of capturing hundreds of thousands of tonnes of CO₂ annually while continuing to generate renewable electricity and heat for the city’s district heating system.
In Brussels, policymakers are also considering the future of CDR financing, including the potential role an EU-wide purchasing program to help generate short-term demand for CRCF-certified removals.
The EU Commission’s Directorate-General for Climate Action (DG Clima) recently published a report written by Ramboll Management Consulting and Ecologic Institute examining how such a programme could generate demand for CDRs from 2025-2030. It recommends that effective design requires strategically investing in a mix of carbon removal credits to support technology development and market growth, and combining public and private funding sources to streamline implementation and increase impact.
According to the report’s recommendations, the program should use a mix of funding sources, the EU budget, contributions from Member States, and private funding.The EU is moving in the right direction to gain a strategic competitive advantage on carbon removal deployment. The key challenge will be to finalize and implement these supply and demand side support schemes to enable the industry to scale up in time to meet the EU climate targets.
Market Signals in the Voluntary Carbon Market (VCM)
Integrating removals into the ETS alone won’t be enough to meet the scale required. The VCM, which is gathering pace, remains critical, especially for sectors and markets not covered by compliance markets.
In Q2 2025, approximately 15.5 million tons of engineered CDR deals were announced – more than half of all engineered volume in deals conducted to date. This comes as AI-driven energy demand is rising sharply, intensifying the pressure to scale durable carbon removals.
Major tech players are at the center of this momentum. On one hand, AI presents a generational business opportunity; on the other, the infrastructure needed to power it, including the carbon intensity of the grid, is driving emissions in the wrong direction. The Lawrence Berkeley National Laboratory predicts that by 2028, more than half of the electricity servicing data centers will be used for AI, and that by the same year, AI could use as much electricity as just over 22% of all US households.
To reconcile this, some early adopters have moved early to secure a robust portfolio of trusted CDRs – including BECCS – as a way to progress decarbonization strategies, offset growing emissions and secure future supply, while supporting AI expansion. But unless others follow suit, and do so at scale, they risk being left without viable pathways to meet their own climate commitments. Investing in quality removals now is not just good policy – it’s an essential move to future-proof growth.
Policymakers, industry leaders, and offtakers in Europe and beyond are shaping the future of permanent removals – embedding them in compliance frameworks, investing in the VCM, supporting innovation across the supply chain, and sending strong, long-term demand signals.
Getting the conditions right today is essential to scaling permanent carbon removal tomorrow – and to meeting climate goals, both in Europe and globally.
Mariano Ruiz, VP Government Affairs and Stakeholder Relations, Elimini
12/05/2025
ENDS