Missed Opportunity for Scaling Up Carbon Removal in Europe: The Failure of the Clean Industrial Deal

Brussels, 26 February 2025: The European Commission has released its highly anticipated Clean Industrial Deal (CID) today, with the goal of aligning climate and competitiveness under one comprehensive growth strategy. While the CID has been praised for its focus on clean manufacturing and long-term policy certainty, there are concerns that it falls short in addressing the urgent need for permanent carbon removal in the short and medium term.

Despite acknowledging the need for a business case for permanent carbon removal, the CID mainly focuses on integrating the EU Emissions Trading System (ETS) as a solution, without proposing other dedicated policies to drive demand for carbon dioxide removal (CDR).

“Europe must take a more proactive approach in promoting CDR if it wants to maintain its leadership in the global clean economy and meet its climate goals,” says Rodica Avornic, Policy Director at Carbon Gap. “There are opportunities within the CID initiatives, such as procurement, the Industrial Decarbonisation Accelerator Act, and tax incentives, that must be leveraged to support the growth of the CDR sector.”

The CID recognizes a €480 billion annual funding gap for the wider clean transition and proposes a variety of measures to address it, including the creation of a Competitiveness Fund, enhanced support through the Innovation Fund, and collaboration with the European Investment Bank (EIB). However, it is unclear how much of this funding will specifically target carbon removal.

Without direct support for CDR, Europe risks falling behind countries like the US, Canada, and Switzerland, which have already mobilized significant financial resources for the sector. This not only threatens the EU’s climate goals but also the economic opportunity to unlock a potential €220 billion annual market and create 670,000 high-quality jobs.

To address this concern, Carbon Gap recommends leveraging upcoming initiatives under the Clean Industrial Deal to support CDR, including revising EU public procurement rules to promote CDR integration and providing explicit and sufficient funding for CDR methods in EU funding programs. Additionally, the proposed Industrial Decarbonisation Bank should explicitly recognize CDR in its scope and offer targeted allocation rounds for different CDR methods.

As the US steps back from its climate ambitions, the EU has an opportunity to assume global leadership by prioritizing CDR and achieving both its climate and economic goals. By 2050, CDR has the potential to unlock a €220 billion annual market, create 670,000 high-quality jobs, and drive innovation, cementing Europe’s position as a global leader in the clean economy.

For more information about Carbon Gap’s work and recommendations for CDR in Europe, please visit https://carbongap.org/. Carbon Gap experts are also available for comment and can be contacted at rodica@carbongap.org (EN, RO) and eloisa@carbongap.org (EN, ES).

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