One shot. One Budget. Will the EU bet on carbon removal?

The EU only has one shot to get its next long-term budget right. As the Commission designs the 2028–2034 Multiannual Financial Framework, we have a clear message: this budget can and must deliver for carbon removal as part of a greater recentering on climate action and European competitiveness. The decisions made now will shape whether the EU leads on breakthrough climate technologies like CDR — or falls behind. The stakes couldn’t be higher.

Why now? Because we only get one shot every seven years to fix what’s not working; now is the time to back what the climate and economy need most. Carbon removal can’t wait another cycle. For that reason, we have submitted a response to the EU’s public consultation to say just that.

The CDR Imperative: climate necessity and strategic opportunity

Carbon dioxide removal (CDR) is not optional. According to the IPCC, it’s essential for climate neutrality – and it’s also a strategic enabler of Europe’s long-term industrial leadership. The European Scientific Advisory Board on Climate Change (ESABCC) estimates the EU will need to remove between 400 million tonnes and 800 million tonnes of CO2 by 2050 to meet its climate targets — from both land-based approaches and novel technologies.

Beyond addressing the climate imperative, scaling up the CDR sector represents a significant economic opportunity. By 2050, it could become a €220 billion annual market, creating an estimated 670,000 high-quality jobs while driving innovation across key sectors like chemicals, hydrogen, carbon management and heavy industry.

Why the next EU budget could make or break carbon removal

CDR remains severely underfunded in the current MFF, receiving less than 0.1% of the EU’s projected climate budget for 2021-2027. This financial neglect is a significant barrier since many CDR methods are still scientifically uncertain or economically unviable.

Carbon Gap’s research indicates that €2.88-5.85 billion will be needed over the next two decades for early-stage innovation to adequately develop CDR methods and get them ready for scale-up. After this initial development push, significant additional funding will be needed to achieve commercial scale once technologies are ready.

But money isn’t the only problem. CDR hasn’t been treated as a strategic priority, and Europe’s funding landscape remains fragmented and hard to navigate – creating  barriers for the very innovators Europe needs. To design a new MFF fit for cleantech and CDR, these challenges must be addressed.

What the next EU budget must fix – a four piece puzzle

To unlock CDR’s full potential, the MFF must act across four key dimensions:

Lock in climate focus – don’t let funding drift

The issue:
Current conversations revolve around increasing flexibility in resource allocation in the future, but such flexibility would risk undermining the stability of climate funding. Climate spending is already stranded and further dilution would hinder the EU’s ability to meet its climate targets. At the same time, simplification must not come at the cost of strategic focus — especially for emerging technologies like CDR.

The fix:

• Ringfence climate funding: Climate spending under the next MFF must be explicitly protected from reallocation. Predictable funding is essential for long-term planning, investor confidence and Europe’s climate credibility.

• Balance simplification with strategic focus: Ensure support across all technology readiness levels (TRLs), with strong emphasis on early-stage RD&I. Simplification must not dilute support for climate innovation.

• Design funding criteria that prioritise innovation potential — not just administrative capacity. This realignment means actively reducing barriers for smaller, early-stage, or under-resourced actors so that high-impact projects aren’t excluded simply because they can’t navigate complex procedures.

These principles set the stage — but without real investment, they’re just words. To deliver the innovation CDR needs, the EU must close current the funding gap.

Bridge the funding gap from the lab to the market

The issue:
CDR remains one of the most underfunded segments of EU climate policy. While a growing number of methods exist, most lack the funding to evolve beyond the lab all the way to the market. The EU will need to allocate between 2.88 billion to €5.85 billion to early-stage RD&I over the next two decades to get them ready for scale up. After that, additional funding will be needed to reach market scale.

The fix:

• Increase RD&I funding for CDR: Commit at least €2.6 billion to early-stage CDR through the MFF, Framework Programme for R&I, and other mechanisms to address open questions.

• Support deployment with dedicated instruments further along in the innovation cycle, through for example:

  • An EU Carbon Removal Pilot Procurement Programme, with a €50 million initial budget across a 3-year period (sourced from the Innovation Fund).

  • A CDR-compatible Industrial Decarbonisation Bank, embedding CDR in its mandate, and launching a €1–2 billion pilot facility to test finance tools like CCfDs and guarantees.

• Leverage the full RD&I funding spectrum:

  • Building on the global CDR Mission under Mission Innovation, launch an EU CDR Mission, to coordinate funding, accelerate innovation and align policy priorities.

  • Establish a CDR Innovation Partnership, modelled after the Clean Hydrogen Joint Undertaking, to pool public and private investment.

  Funding is vital, but it won’t go far if CDR stays off the EU’s strategic radar. Without clear prioritisation, carbon removal will stay stuck on the sidelines.

  Put CDR where it belongs – at the strategic core

  The issue:
  Despite being recognisedrecognised as an area in need of R&I support by the Commission, CDR lacks visibility and coherence across EU programmes. It is often conflated with CCS and overlooked in strategic planning.

  The fix:

  • Recognise CDR as a strategic priority pillar in any future Competitiveness Fund — unlocking coherent support across research, infrastructure, and market development.

  • Embed visibility across all relevant programmes:

    • Establish a dedicated “destination” in Horizon Europe’s successor fund;

    • Define CDR as a thematic priority in Innovation Fund calls;

    • Prioritise CDR under the LIFE Programme’s Climate Action sub-programme;

    • Launch a Challenge Call for durable CDR innovation under the European Innovation Council (EIC).

    • Develop a formal EU-level CDR RD&I roadmap, that builds on the European Commission’s report on R&I for climate neutrality by 2050 which identified CDR as a key solution in need of R&I support and highlighted critical gaps requiring attention, and other expert databases. We’ve developed a CDR Research Gaps Database that compiles over 350 questions yet to be addressed, based on five strategic objectives that RD&I for carbon removal should target:

    • Unlock new CDR methods

    • Optimise existing concepts

    • Strengthen MRV

    • Advance governance

    • Improve CO₂ transport and storage infrastructure

    However, even with a significant increase in funding opportunities, CDR can only scale if innovators can navigate those opportunities — not get lost in the current funding maze.

    Make the system work for climate innovators

    The issue:
    CDR innovators must navigate fragmented, inconsistent and administratively heavy processes. Smaller actors and first-time applicants face disproportionate hurdles.

    The fix:

    • Create a central access point for CDR via a Commission-hosted portal (DG RTD, CINEA, DG CLIMA) that clusters relevant calls and aligns with technology maturity stages.

    • Simplify procedures for early-stage actors to harmonise criteria, reduce application burdens for pilot grants and accelerate decision timelines.

    • Provide tailored support by:

      • Establishing a CDR Helpdesk and Technical Assistance Facility to guide innovators in navigating funding opportunities, improving application quality and increasing project readiness.

      • Appointing an EU CDR RD&I Coordinator to oversee and align CDR-related research and funding across EU programmes, ensuring coordination between ocean, land, and industrial research clusters.

      • Improving predictability by communicating calls and deadlines well in advance.

      • Tracking outcomes by introducing performance indicators to measure how well EU funds reach emerging technologies like CDR.

      The bottom line, and the moment to act

      The next MFF will not just fund programmes, it will define Europe’s position in the global clean economy. Supporting carbon removal is more than a climate imperative; it’s a test of the EU’s ability to fund strategic innovation, unlock industrial leadership and reach climate goals.

      The next Multiannual Financial Framework must reflect the ambition of the European Green Deal. It must recognise CDR as a strategic pillar, invest in early-stage innovation and deployment and make EU funding accessible to the technologies of tomorrow.

      This budget isn’t just about funding – it’s about climate ambition, strategic foresight and commitment. Let’s not just fund the future — let’s shape it. Europe only gets one shot. Let’s make it count.

      By Eloisa Viloria

      CDR-compatible Industrial Decarbonisation Bank