Carbon Capture, Use And Storage Under The EU ETS, The Proposed EU ETS Revision And CBAM

On July 17, 2026, the European Commission published its proposal to revise Directive 2003/87/EC (the EU ETS Directive), formally titled “proposal for a directive amending Directive 2003/87/EC and Decision (EU) 2015/1814 as regards driving competitiveness and cost-effective decarbonisation” (document reference 2026/0212 (COD)) (the EU ETS Proposal)¹. In an article published in August,² we have examined the international credits under the EU ETS Proposal and the EU’s Carbon Border Adjustment Mechanism (CBAM) implementing regulations.

In this article, we examine the current rules and proposed changes to the regulatory framework for carbon capture, use and storage (CCUS) under the EU ETS Directive, the EU ETS Proposal and the EU’s Carbon Border Adjustment Mechanism (CBAM), established under Regulation (EU) 2023/956 (the CBAM Regulation). We describe how CCUS is currently treated under the EU ETS, how the EU ETS Proposal would expand that treatment, and how the CBAM implementing