Permanence and Liability: Legal Considerations on the Integration of Carbon Dioxide Removal into the EU Emissions Trading System

Abstract

This article examines how carbon dioxide (CO2) removal credits can be integrated into the European Union (EU) Emissions Trading System (ETS), focusing on questions of permanence and climate liability. It identifies challenges within the integration process and analyzes approaches from practice and literature to cultivate learning. These approaches apply different strategies to address the issue of permanence, including temporary credit issuance, granting credits once a certain number of carbon tonne-years have been accumulated, or issuing credits at the beginning of the project period and relying on liability instead. Drawing from the findings of this research, the article presents legal considerations that may inform a proposal for an EU legislative act on the integration of carbon removal credits into the EU ETS. It suggests that only credits issued for permanent CO2 removal should be integrated to ensure the environmental integrity of the system. Furthermore, the liability of the project operator should transfer to the Member State under certain conditions to make liability risks more predictable.