Since 17 July 2026, the CCU community and the clean tech world at large have been in effervescence: new ETS rules have been tabled, and many will have far-reaching consequences for our nascent value chains. But that excitement is accompanied by questions and some form of unease: new rules can mean new uncertainty to understand, interpret, apply EU rules. And this is particularly important for technologies where legal certainty is consubstantial to investment decisions.
As CO2 Value Europe, we see the new ETS proposal as a very good starting point for CCU: it intends to tackle regulatory gaps for CCU and create new interest in the technologies. But with rules already being complex for CCU, this new proposal brings another layer of complexity.
Four Approaches to CO2 Accounting Under the New Framework
Under the new framework:
- No changes for CO2 mineralisation (called “Permanent CCU” in EU vernacular): ETS CO2 captured and stored in construction products continues to be exempted from ETS pricing
- Midstream approach for CCU fuels: ETS CO2 captured and used to make e-fuels like e-methanol, e-methane or e-kerosene will no longer be submitted to carbon pricing upstream (where it was originally produced) but at distributor’s level (where the CCU fuel is sold)
- Downstream approach for (some) carbon-based chemicals: new rules will integrate waste incineration under ETS, creating a level playing between conventional fossil products and CCU equivalents. The CO2 will be paid once, when it is ultimately released in the atmosphere
- Upstream approach for direct CO2 utilisation: rules to maintain carbon pricing upstream when CO2 is used outside ETS activities (e.g. pharmaceuticals, industrial use, etc.)
A Step Forward, But With Increasing Complexity
As a CCU community, we have ambivalent feelings about the possible outcomes of the proposal: on the positive side, we see EU policy-makers are trying – actually and genuinely trying – to create a more supportive framework for CCU, and we think this is a real, tangible, long-lasting win. We believe the proposal sets a number of precedents that will be existential for CCU, finally benefiting from a level playing field under ETS. On the other side, we fear that such rules will be increasingly complex for project developers to understand: they will virtually need to understand every possible CCU scenario to grasp the benefits and constraints that come with it.
Where the Framework Could Go Further
And those remarks are only focusing on CO2 accounting: there are plenty of other topics we feel the proposal has the heart in the right place, but could go further and faster towards destination: on financing support for CCU fuels, on including CO2 mineralisation from biogenic/DAC CO2 in carbon removals, on unlocking the potential for reusing all sources of CO2 across valorisation pathways, etc.
Building a More Inclusive ETS Framework for CCU
This is why we believe the proposal can be made better, stronger, more supportive for EU-based projects and for projects based outside Europe: by building on the philosophy of the Commission, we can make the rules even more inclusive for CCU products, and even more effective in driving companies away from fossil feedstocks.
Our position paper is available here, highlighting the main elements we want to improve in the proposal. For members only, we also worked on a detailed brief aiming to analyse and highlight the questions remaining in the proposal: members or wannabe members can reach out to learn more about exclusive CO2 Value content (tudy.bernier@co2value.eu).
