![]() Furthermore, a special opportunity might apply for the inclusion of BECCS installations. EU legislation already provides safeguards for physical carbon leakage concerning CCS, making Bioenergy with Carbon Capture and Storage (BECCS) and Direct Air Capture and Storage prioritized for inclusion in the EU ETS. Contrary to a price collar without dedicated support from CRCs, in this case (net) compliance with the overall cap is maintained. Instead of direct interaction between the companies involved in emissions trading and the providers of CRCs, the regulatory authority could also transitionally act as an intermediary by buying CRCs and supplying them in turn conditional upon observed allowances prices, for example, by supporting a (soft) price collar. Given current cost estimates for BECCS and DACCS, minimum quantities for the use of removals, as opposed to ceilings as currently discussed, would be required to promote the near-term integration of such technologies. To analyze cap-and-trade systems encompassing negative emissions, we introduce the effective (elastic) cap resulting from the integration of CRCs in addition to the regulatory (inelastic) cap, the latter now being binding for the net emissions only. Here, we conceptually discuss various economic, legal, and political challenges surrounding the integration of CRCs into the EU ETS. Amending the EU ETS legislation is required to create enabling conditions for a net negative cap. Despite this ambition, no mechanism allows for the inclusion of CO 2 removal credits (CRCs) in the EU ETS to date. In one of the central scenarios for meeting an European Union-wide net zero greenhouse gas (GHG) emissions target by 2050, the emissions cap in the European Union Emissions Trading System (EU ETS) becomes net negative. 4Unit of Environmental Change, Department of Thematic Studies, Centre for Climate Science and Policy Research, Linköping University, Linköping, Sweden. ![]() 3Research Division: EU/Europe, German Institute for International and Security Affairs, Berlin, Germany.2Chair of International Law of the Sea and International Environmental Law, Public International Law and Public Law, University of Hamburg, Hamburg, Germany.1Research Center Global Commons and Climate Policy, Kiel Institute for the World Economy, Kiel, Germany.Wilfried Rickels 1 *, Alexander Proelß 2, Oliver Geden 3, Julian Burhenne 2 and Mathias Fridahl 4 ![]()
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