EU review opens door to carbon removals in ETS, confirms international credit use for 2040 goals

Fastmarkets

Jul 20

The European Commission published on Friday July 17 a proposal as part of the long-awaited ETS (Emissions Trading System) review package. The review acknowledges that achieving the EU’s 2040 target of...

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One of the best stock trading platforms in Singapore.","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.be62fbe1.png","ogUrl":"https://www.itiger.com/news/2653217799"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"SGP","license":"TBSG","edition":"fundamental"},"isCrawlerRequest":true,"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2653217799\",edition:\"fundamental\",auth_exemption:1,,,undefined,":{"share":"https://ttm.financial/m/news/2653217799?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-07-20 12:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2653217799","market":"us","top_or_hot":-1,"title":"EU review opens door to carbon removals in ETS, confirms international credit use for 2040 goals","media":"Fastmarkets","content":"<div>\n<p>The European Commission published on Friday July 17 a proposal as part of the long-awaited ETS (Emissions Trading System) review package. The review acknowledges that achieving the EU’s 2040 target of...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/eu-review-opens-door-to-carbon-removals-in-ets-confirms-international-credit-use-for-2040-goals/\">Source Link</a>\n\n</div>\n","source":"fastmarkets_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>EU review opens door to carbon removals in ETS, confirms international credit use for 2040 goals</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEU review opens door to carbon removals in ETS, confirms international credit use for 2040 goals\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-07-20 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/eu-review-opens-door-to-carbon-removals-in-ets-confirms-international-credit-use-for-2040-goals/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The European Commission published on Friday July 17 a proposal as part of the long-awaited ETS (Emissions Trading System) review package. The review acknowledges that achieving the EU’s 2040 target of...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/eu-review-opens-door-to-carbon-removals-in-ets-confirms-international-credit-use-for-2040-goals/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4156","symbol_name":"煤与消费用燃料","start_time":0,"source_url":"https://www.fastmarkets.com/insights/eu-review-opens-door-to-carbon-removals-in-ets-confirms-international-credit-use-for-2040-goals/","article_id":"2653217799","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/eu-review-opens-door-to-carbon-removals-in-ets-confirms-international-credit-use-for-2040-goals/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2653217799","pubTimestamp":1784520000,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"Carbon removals in the EU ETS gain a compliance-funded buyer for the first time, while international credits get a capped role from 2036 toward the bloc’s 2040 target.","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4156":"煤与消费用燃料","KLMT":"Invesco MSCI Global Climate 500 ETF","ETS":"Elite Express Holding Inc.","BK4232":"货物陆运"},"translate_title":"欧盟审查为排放交易体系中的碳清除打开了大门，确认国际信用用于 2040 年目标","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"KLMT":0.67,"ETS":1.5},"content_text":"The European Commission published on Friday July 17 a proposal as part of the long-awaited ETS (Emissions Trading System) review package. The review acknowledges that achieving the EU’s 2040 target of a 90% net emissions reduction will require both a large-scale deployment of permanent carbon removals and a limited use of international credits. This represents the most significant structural changes to the EU carbon market since the Fit for 55 reforms.\nThe proposals effectively create two entirely new demand signals for the carbon markets. One for EU-certified permanent removals from Bioenergy with carbon capture and storage (BioCCS) and direct air carbon capture and storage (DACCS) projects beginning in 2031, and another for high-integrity international credits beginning from 2036.\nWopke Hoekstra, European Commissioner for Climate, Net Zero and Clean Growth, said in a press conference on July 17 that the Commission is attempting to balance three objectives with the proposed reform: maintaining the credibility of the ETS, lowering long-term decarbonization costs for European industry and stimulating entirely new carbon markets capable of delivering removals and Article 6-aligned international credits.\nThe proposal will now move into the EU’s ordinary legislative procedure, where the European Parliament and Council will each develop their negotiating positions before entering trilogue talks with the Commission.\nThe international-credit and removals provisions are likely to be among the most closely scrutinized elements, with lawmakers expected to test whether the safeguards are strong enough to preserve domestic ETS ambition while giving industry greater long-term flexibility.\n\nCarbon removals enter the EU ETS for the first time\nThe ETS review proposes integration of domestic permanent carbon removals into the EU ETS. This would mark the first formal role for negative emissions in the bloc’s flagship carbon market. The proposed model would create additional allowances matched by an equivalent volume of certified permanent removals, preserving a one-for-one link between new supply and domestic carbon removals.\nThe Commission has proposed a new Article 9c that would increase the overall EU ETS cap by 250 MtCO2e allowances between 2031 and 2040. These allowances would be allocated to the Commission and auctioned specifically to fund the purchase of an equivalent volume of certified permanent carbon removals.\nBecause removal costs remain well above prevailing EUA prices, the proposal also includes a financial backstop. In addition to the 250 MtCO2e tied to removal purchases, the Commission could auction a further 10 MtCO2e between 2031 and 2040 if initial revenues are insufficient to procure the planned volume of removals.\nOnly two removal pathways would initially qualify — BioCCS and DACCS verified under the EU Carbon Removal Certification Framework (CRCF).\nThe architecture is notable because it avoids creating a direct CDR market between emitters and removal providers in the first phase. Instead, the Commission would act as the central buyer, purchasing certified removal units from project developers and then cancelling them.\nFelix Gallagher, lead EU ETS analyst at Fastmarkets says, “The integration of 250 MtCO2e may be met with scepticism given quantity constraints and the resulting cost implications if eligible removals remain limited to two pathways.”\nThe proposal also creates a limited pathway for emitters to use their own removals. Installations, shipping companies and aircraft operators could offset fossil emissions with BioCCS removals generated from their own activities, provided the removals are certified under the CRCF. The mechanism, however, cannot generate negative-emissions credits or create additional EUAs.\nA key requirement for ETS integration is that removals remain verifiable over time and subject to liability in the event of reversal. Under the proposal, carbon dioxide that has been credited as a permanent removal but subsequently leaks from a geological storage site would trigger a surrender obligation under the ETS, effectively recreating the emissions liability.\nThe review leaves the door open to broader participation from nature-based removals. By the end of 2034, the Commission will assess the purchasing program and consider whether carbon farming and other nature-based CRCF-certified removals could contribute to permanent removals in the future. No such integration is proposed for now, but the review acknowledges that sufficiently durable and verifiable nature-based sequestration could eventually play a larger role in the EU’s long-term net-zero framework.\n\nEU gives international credits a much-needed demand signal\nThe Commission has proposed a central facility to procure up to 260 MtCO2e high-quality international credits between 2036 and 2040, funded by auctioning an equivalent volume of ETS allowances. The move would directly link future international credit demand to the EU ETS compliance architecture.\nThe ETS review states that these credits must be “high-quality and high-integrity” and aligned with the Paris Agreement. While it does not explicitly refer to Article 6 credit procurement, Brussels indicates that the criteria will complement rules emerging under Article 6.4 mechanism where appropriate.\nGallagher observed that “Procurement through a central buying facility was an expected move by the commission and will be welcomed by those concerned about the environmental integrity of credits used.”\nDetailed eligibility criteria will be set out in separate legislation, with further proposals on national targets and the use of international credits expected later in 2026.\nThe review frames these credits as a complement to domestic action, arguing that lower-cost international abatement could help the EU meet its climate goals more efficiently while supporting emissions cuts in partner third countries under the Paris Agreement.\n\nEU puts numbers behind Article 6 international credit demand\nThe proposal clarifies how international credit flexibility would apply to the EU’s 2040 climate target, legislated earlier in April. From 2036, high-quality Paris Agreement-aligned credits from partner countries could count toward the bloc’s 90% net emissions-reduction goal, capped at 5% of 1990 EU net emissions.\nIf fully used, that would leave 85 percentage points to be delivered through domestic emissions cuts and removals, while the remaining 5 percentage points could come from international mitigation outcomes.\nThe review also narrows previous uncertainty over timing and accounting, which had put potential Article 6 demand between 236 MtCO2e and 724 MtCO2e over 2036–2040 depending on the interpretation.\n\nCredit flexibility lowers the post-2035 LRF\nAs the Commission assumes that part of the EU’s required emissions-reduction effort could be achieved through international credits, the proposal adjusts the long-term ETS cap trajectory accordingly. The proposal keeps a relatively steep annual reduction in the cap through 2035, with the linear reduction factor (LRF) set at 3.7% between 2031 and 2035, before lowering it to 1.7% from 2036 onwards.\nThis is because the Commission is applying only a proportional share of the EU-wide international-credit flexibility for ETS sectors. As ETS-covered sectors account for roughly 40% of the EU’s total emissions profile, around 2 percentage points of the wider 5% flexibility would be reflected within the ETS cap, while the remaining 3 percentage points would apply outside the ETS.\nWopke Hoekstra, European Commissioner for Climate, Net Zero and Clean Growth, said in the press conference on July 17, “We’re not asking more for the ETS from the ETS sectors, we’re also not asking less… if you take the ETS sectors, roughly 40% of the total, so that gives you 2%… up to 2% within the scope, and the other 3% of flexibilities are then outside of the scope, so in the other sectors.”\nThe slower post-2035 trajectory reflects the assumption that high-integrity international credits would contribute to the EU’s overall 2040 climate target, reducing the amount of domestic abatement required from ETS-covered sectors. In practice, this would create more emissions space within the ETS than under a pathway in which the full 90% net target had to be delivered domestically.\nGallagher commented that “The limit of 2% on flexibilities afforded to the ETS sectors rather than the full 5% is another indication of the Commission’s unwillingness to water down the ETS.”\nThat distinction is important for the EUA market because it limits the extent to which international credits can ease pressure on ETS sectors directly. The lower post-2035 LRF would incorporate only the portion of international-credit flexibility attributable to ETS sectors, rather than the full 5% headline figure.\n\nBackstop protects EU ETS ambition\nThe proposed LRF adjustment is not automatic or unconditional. Article 9b of the review requires the Commission to assess, by January 2033, whether a sufficiently robust market for high-quality and high-integrity international credits has emerged. That review would examine environmental integrity, accounting robustness, verification standards, market liquidity, available supply, competitiveness implications for ETS sectors and consistency with the EU’s climate-neutrality objective.\nIf the Commission concludes that credible and cost-effective credits are not available in sufficient quality or volume, the ETS would revert to a more ambitious domestic pathway. Under this backstop scenario, the post-2035 LRF would rise from 1.7% to 2.7%, restoring a trajectory aligned with a full 90% domestic emissions-reduction target by 2040.\nIn other words, the additional emissions space created on the assumption of international credit availability would disappear, and ETS sectors would have to deliver the corresponding reductions within Europe instead. The safeguard is likely intended to reassure lawmakers and environmental groups that the use of international credits would not permanently weaken domestic decarbonization incentives.\n\nA new EU ETS compliance framework emerges\nTaken together, the international-credit and removals proposals would reshape the EU ETS from a system focused solely on cutting covered emissions into a broader net-emissions framework. The future market would not only price emissions, but also help finance permanent removals and, from 2036, potentially support Article 6-aligned mitigation outside the EU.\nFor international credits, the proposal marks a significant political endorsement of Article 6-aligned carbon markets and could create one of the largest sources of sovereign demand globally, albeit under strict integrity and eligibility requirements. For removals, it would establish a guaranteed, compliance-funded demand source that could support investment in DACCS and BioCCS across Europe.\nFor EUAs, the impact is more nuanced. The introduction of international credits may introduce a potentially bearish long-term element as it creates additional compliance flexibility and emissions space within ETS sectors, but the effect is constrained by the 2% limit, strict eligibility criteria and uncertainty over whether sufficient high-integrity credit supply will materialize.\nThe review gives both international credit and removals markets the policy signal they had been seeking and a route into the EU’s long-term climate architecture. But two major questions remain: whether the package will survive the legislative process, and if the market can deliver the necessary volumes of high-integrity Article 6 aligned credits and certified permanent removals at the scale, cost and quality required.\n\n\n\nKnow your sector’s allowance cost exposure to 2035\nSub-sector emissions modeling under scenarios you control, from metals to power and heat to pulp & paper\n\nRequest demo","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"1","news_tag":"policyRegulatory","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}