Decoding Negative Emissions: From DACCS & BECCS to EU ETS Integration

An in-depth cost and volume analysis from 2025 to 2050

Key Insights

Phased Integration: A pilot phase is projected to begin in 2025, with gradual full integration into the EU ETS between 2030 and 2035 and a net-negative cap designed by 2040.
Cost Trends: DACCS and BECCS costs are expected to fall over time due to technological advancements and scale increases, with future costs estimated around €55-134/tCO2 for BECCS and €122-539/tCO2 for DACCS (with some projections as low as €100-300/tCO2 for DACCS by 2050).
Volume Deployment: Negative emissions volumes are expected to ramp up significantly with a target of 5 MtCO2 removal by 2030 scaling up to hundreds of MtCO2 per year by 2050, although deployment volumes may differ between BECCS and DACCS.

Overview of DACCS and BECCS Integration with EU ETS

The European Union is strategically aligning its Emissions Trading System (EU ETS) with emerging negative emission technologies, specifically Direct Air Carbon Capture and Storage (DACCS) and Bioenergy with Carbon Capture and Storage (BECCS). These technologies are crucial for achieving net-zero and eventually net-negative emissions. The integration is expected to occur in distinct phases:

Phase 1: Pilot Phase (2025 - 2030)

A pilot phase is set to launch in 2025, examining the feasibility, regulatory framework, and carbon credit certification for permanent removals from DACCS and BECCS. This period will focus on:

Collecting data on costs and operational scalability.
Developing regulatory clarity and market acceptance.
Establishing initial allocation of carbon allowances, enabling these negative emissions to become fungible with conventional credits.

Phase 2: Gradual Expansion (2030 - 2035)

During this time, full integration into the EU ETS is expected. The technologies will face increased competition from traditional abatement methods as well as internal market pressures to lower costs. Key characteristics include:

Scaling up volume capacity in line with EU climate targets.
Enhanced cost competitiveness due to technological maturity and infrastructure sharing with fossil CCS systems.
The application of new carbon removal credits into the EU ETS framework, yielding a potential boost in the overall carbon allowance market.

Phase 3: Net-negative Cap (Post-2040)

With an ambition of establishing a net-negative emissions cap from 2040, the EU ETS will further incentivize drastic increases in the volumes of captured CO2. This phase anticipates:

Rapid expansion in volumes reaching hundreds of MtCO2/year by 2050.
A significant drop in the marginal costs as further scale efficiencies and regulatory incentives come into play.
Utilization of captured negative emissions to not only offset remaining emissions but to drive the achievement of climate neutrality.

Cost Analysis: DACCS & BECCS Technologies

Cost projections for DACCS and BECCS differ due to the nature of technologies and operational scales. The available forecasts indicate:

BECCS Costs

For BECCS, initial assessments estimate future costs to be in the range of:

€55 to €134 per ton of CO2 captured (European Commission estimates).
The IEA projects that by 2050 costs could fall to around €50-200/tCO2.

DACCS Costs

DACCS has a higher cost base given its current stage of development and energy intensity. Projections indicate:

European Commission estimates place DACCS costs from €122 to €539 per ton of CO2.
Expert assessments and some IEA projections show that costs could lower to between €100-300/tCO2 by 2050 as economies of scale and technological advancements are realized.

These cost trajectories are critical as they determine the point at which negative emissions through DACCS and BECCS become financially competitive within the EU ETS’s allowance market.

Volume Projections and Market Impact

Future deployment volumes are directly tied to the success of pilot projects, subsequent regulatory support, and technological improvements. The forecasted volumes include:

Near-Term Volumes (2025-2030)

Initial pilot phases target smaller-scale deployments with the EU Commission aiming for about 5 million tons (Mt) of negative emissions by 2030. These early-stage projects focus on:

Establishing proof of concept and validating certification methods for permanent carbon removals.
Testing operational feasibility and integration costs with existing EU ETS mechanisms.

Mid-Term Volumes (2030-2035)

As the integration progresses, the EU anticipates a sharper scaling up:

Scaling infrastructure and operational capacities to handle up to tens of MtCO2/year, potentially reaching 50-200 MtCO2/year for the combined technologies by the mid-2030s.
Increased technical maturity will contribute towards the larger share of BECCS due to its advantageous placement near biomass sources compared to the more location-flexible DACCS.

Long-Term Volumes (2040-2050)

The most dramatic growth is anticipated in the period leading to 2050 where:

The EU ETS is positioned to support captures on the order of hundreds of MtCO2 per year.
Modelling scenarios suggest that by 2050, BECCS could contribute significantly (with estimates from IPCC highlighting up to 304 MtCO2/year from BECCS alone in Europe), while DACCS, although promising, might contribute a smaller share initially as its deployment scales up later.

These volume targets have key implications for how negative emissions credits are valued and traded, influencing both market liquidity and overall carbon allowance prices.

Comparison Table: Cost and Volume Projections

The table below summarizes the cost estimates and projected volumes for DACCS and BECCS over the three main phases, enabling a quick side-by-side comparison.

Parameter	2025-2030 (Pilot Phase)	2030-2035 (Ramp-Up)	2040-2050 (Net-Negative Stage)
BECCS Cost (€/tCO2)	€55 - €134	€50 - €200	Further reduced due to scale effects
DACCS Cost (€/tCO2)	€122 - €539	€100 - €300 (with early cost reductions)	Potential to decline further with advanced technology
Negative Emissions Volume	~5 MtCO2/year (initial certification)	Scaling to 50-200 MtCO2/year (combined deployment)	Hundreds of MtCO2/year (targeting net-negative cap)
EU ETS Integration	Pilot experiments and regulatory design	Full integration of CDR credits with ETS allowances	Establishment of a net-negative cap incorporating negative emissions

Visualizing the Trends

The following radar chart provides a visual representation of key performance parameters (cost, scale, regulatory maturity, and market integration) for DACCS and BECCS across the major timeline phases. This visualization underscores how improvements and reductions in costs are expected to correlate with increased operational scale and regulatory support.

The radar chart clearly illustrates the progressive improvement in cost efficiency, scale, regulatory maturity, and market integration from the initial pilot phase through to the net-negative stage.

Mermaid Mindmap

Below is a diagram that maps out the key components of the integration process for DACCS and BECCS into the EU ETS. This mindmap helps to visualize the interconnections between cost, volume, regulatory frameworks, and market impact.

mindmap root["EU ETS Integration"] sub1["Pilot Phase (2025)"] sub11["Cost Data Collection"] sub12["Regulatory Trials"] sub2["Ramp-Up (2030-2035)"] sub21["Full Integration"] sub22["Scale Expansion"] sub23["Market Acceptance"] sub3["Net-Negative Cap (2040+)"] sub31["High Volume Deployments"] sub32["Cost Reductions"] sub33["Permanent Credits"]

Detailed Discussion

To consolidate the findings:

Phased Approach and Timeline

The projected timeline starts with a pilot phase in 2025 that tests the integration of DACCS and BECCS into the EU ETS on a smaller scale. This stage aims to gather essential data, help establish regulatory criteria, and validate certification for permanent carbon removal. The subsequent ramp-up phase from 2030 to 2035 envisions full integration into the EU ETS, with carbon removal credits becoming more fungible and recognized in the carbon market. The transition from a pilot to a full-scale deployment will substantially depend on policy incentives, technological improvements, and the degree of market acceptance. Finally, from 2040 onwards, with the EU targeting a net-negative emissions cap, there is an anticipated surge in deployment volume as the system leverages economies of scale and further cost reductions.

Cost Competitiveness

The economic viability of DACCS is initially hindered by its high cost relative to BECCS. However, technological advancements and increased deployment are expected to drive down the costs significantly. BECCS benefits from existing infrastructure and lower deployment costs relative to DACCS. With the EU ETS evolving in tandem, both technologies are projected to become more cost-competitive with traditional abatement measures. As carbon credits start reflecting the value of permanent removals, further reduction in marginal capture costs will be crucial.

Volume Scaling and Market Impact

Volume projections are as critical as cost trends. The pilot phase will begin with relatively modest volumes (around 5 MtCO2/year) but is expected to become robust as the technologies scale. The mid-term period (2030-2035) is key to achieving a combined deployment in the range of 50-200 MtCO2 per year. Looking towards 2050, Europe’s negative emission targets imply the need for hundreds of MtCO2/year of CO2 removal to support the net-negative cap. This rapid scaling will also provide liquidity in the carbon market as negative emissions credits become a core component of the EU ETS.

Frequently Asked Questions (FAQ)

What is the pilot phase for DACCS and BECCS in the EU ETS?

The pilot phase starting in 2025 is an initial testing and integration period designed to collect data on technology costs, validate certification for permanent removals, and establish the regulatory groundwork for funnelling these credits into the EU ETS.

How are the costs of DACCS and BECCS expected to change by 2050?

For BECCS, costs are projected to fall to around €50-200/tCO2, while DACCS could drop to €100-300/tCO2, primarily driven by technological innovations, increased scale, and regulatory support, making them more competitive within the EU ETS framework.

What are the anticipated deployment volumes for these technologies by 2050?

Volume estimates suggest an initial deployment of around 5 MtCO2/year in the pilot phase, scaling to between 50-200 MtCO2/year during 2030-2035, and eventually reaching hundreds of MtCO2/year by 2050, as the EU ETS targets a net-negative emissions cap.