On the Way To an Internal Market for CO,: Priority to Negative Emissions

With its Industrial Carbon Management Strategy, the European Commission has defined an initial framework for the future promotion of CO₂ capture, storage and use in the EU. In particular, negative emission technologies like direct air capture promise to play a key long-term role on the path towards a climate-neutral Europe. However, timely capacity building requires an early technology uptake, which is currently impeded by various market obstacles, including learning externalities, coordination failure and the lack of a stable revenue perspective. Under these conditions, clear priorities and support measures are needed to create a genuine internal market for CO₂. A successful strategy should be based on three pillars: the promotion of negative emissions via carbon-contracts-for-difference, standards and coordination devices for the EU-wide development of a carbon infrastructure as well as the establishment of technology partnerships at the global level.