The European Commission recently proposed making the European Union a major buyer of permanent carbon removal. If adopted, it would represent the largest demand signal the durable carbon removal industry has ever seen.
The Proposal
Last month, the European Commission proposed reforming the EU Emissions Trading System (ETS) to allow – for the first time – permanent carbon removal as part of its pathway to a 90% emissions reduction by 2040.
Under the proposal, the Commission would increase the ETS allowance pool by 250 million allowances, auctioned between 2031 and 2040, and use the proceeds to purchase a corresponding volume of certified permanent removals.
Only biogenic carbon capture and storage (BioCCS) and Direct Air Capture with Carbon Storage (DACCS), certified under the EU’s carbon removal framework, would initially qualify. Annual procurement would build toward 48 million tonnes by 2040.
Analysts estimate the resulting compliance market at roughly €50 billion ($57 billion) over the decade, based on the Commission’s own price assumptions. The final volume purchased will depend on removal prices and the program’s design, but even the low end of that range is a scale the industry has never seen from a single buyer.
Why This Scale Matters
The durable removals industry has delivered roughly 1.6 million tonnes of CO₂ removal in its entire history. Frontier, the largest corporate advance-purchase program to date, has committed close to $1.8 billion since 2022. At an estimated €50 billion, the proposed EU market would dwarf even the largest voluntary purchasing initiatives to date, and it would come with a legislated buyer and defined funding mechanism rather than relying on voluntary corporate demand alone.
The Commission says the proposed mechanism is designed to give the carbon removal industry predictability of demand, supporting market liquidity and the uptake of the technologies.
That kind of statutory, revenue-backed demand is the sort of long-term offtake signal that can make infrastructure easier to finance. For investors, that begins to change the question from whether a durable market for carbon removal will emerge to how quickly the industry can build the infrastructure to serve it.
What Would It Take To Deliver?
Reaching 48 million tonnes a year by 2040 means removal infrastructure must be deployable in high volume, financeable on standard project terms, and sited where suitable energy inputs are available.
However, many traditional Direct Air Capture pathways depend on high-grade heat and consume significant volumes of water to run, which limits where they can be built and can add cost and permitting friction at scale.
A system that can use low-grade waste heat already being generated on-site, while producing water to operate, is better positioned to meet that need. It opens up deployment alongside infrastructure where suitable waste heat is already available, including at data center campuses.
Avnos’ Hybrid Direct Air Capture was designed with exactly those constraints in mind.
Whatever the final shape of the legislation, the direction matters: one of the world’s largest carbon markets is proposing to design permanent carbon removal into its long-term compliance architecture. That is a signal of where the market is heading.
Read the European Commission’s official announcement here.