European cities aim for carbon removal but face challenges
European cities banking on carbon removal without delivery plans
A new study of 103 European cities reveals a critical gap between climate ambition and practical implementation. Cities across the continent plan to offset roughly one-fifth of their emissions using carbon removal by 2030. However, most have not yet determined how those removals will actually be delivered.
The analysis, presented by the Potsdam Institute for Climate Impact Research and linked to research in Nature Climate Change, estimates that urban carbon removal plans represent approximately 61 million tonnes of CO₂. That figure is close to Austria's entire annual emissions. Despite the scale of these commitments, current removal capacity covers only 18% of the emissions cities intend to offset.
For UK businesses, the findings carry a clear message. Councils and metro areas are setting net-zero targets that depend heavily on future removal technologies. Yet the infrastructure, contracts, and verified pathways to deliver those removals remain largely absent. Firms bidding for public sector contracts may therefore face evolving procurement standards as local authorities scramble to bridge this gap.
Cities plan to offset a fifth of emissions without verified capacity
Researchers examined climate plans from 103 European cities, including 22 capital cities. The study reveals that planned carbon removals account for about 20% of projected emissions by 2030. However, the mechanisms to achieve this are not yet in place.
Current estimated carbon removal capacity stands at just 18% of what cities need to meet their residual emissions targets. Consequently, a significant shortfall exists between stated goals and available resources. Most cities rely on vegetation and land-based methods in their plans. Nevertheless, many fail to specify which removal techniques will be used, when capacity will come online, or how volumes will be verified.
The remaining emissions in these cities are concentrated in sectors often considered easier to decarbonise. Energy accounts for a median 50% of residual emissions, while transport contributes 31%. Therefore, the reliance on removals appears premature given that direct emissions cuts in these areas remain technically and economically viable.
Meanwhile, the European Commission's Joint Research Centre has published guidance urging cities to separate gross emissions, in-boundary removals, and purchased removal credits clearly. This distinction matters for accounting integrity and prevents double counting in net-zero claims.
Hard-to-abate emissions make up smaller share than expected
The research highlights an uncomfortable truth. Cities are planning to use carbon removal as a substitute for emissions reductions they have not yet fully pursued. Energy and transport dominate the remaining emissions profile. These sectors offer well-established decarbonisation pathways through electrification, efficiency, and fuel switching.
By contrast, genuinely hard-to-abate emissions typically include aviation, certain industrial processes, and agriculture. The study suggests that cities are applying removal strategies before exhausting direct reduction opportunities. This approach carries risk. If removal capacity fails to materialise, cities may miss their 2030 targets entirely.
The Potsdam researchers recommend prioritising demand-side measures, which could cut emissions by 40% to 80% depending on context. Recent research on buildings and transport supports this direction. Demand-side strategies, combining efficiency improvements, electrification, and shifts in consumption patterns, can deliver rapid and deep emissions cuts.
For businesses operating in urban areas, this matters. Procurement frameworks tied to local climate targets may shift as councils realise that removals alone cannot close the gap. Contracts may increasingly favour suppliers demonstrating actual emissions reductions rather than offset reliance. Similarly, property portfolios in cities with aggressive net-zero plans may face stricter energy performance requirements sooner than anticipated.
What the carbon removal gap means for procurement and compliance
UK firms supplying goods and services to public bodies already navigate carbon reporting requirements under PPN 06/21. As cities refine their net-zero strategies, procurement criteria will likely tighten further. Buyers may demand evidence of Scope 3 reductions, particularly in transport and energy-intensive supply chains.
The JRC guidance states that for truly residual emissions, cities can use either local in-boundary removals or out-of-boundary carbon removal credits. However, credits must meet strict quality and integrity criteria aligned with EU rules. This standard will influence how UK businesses structure their own carbon strategies, especially those trading with European markets or bidding for cross-border contracts.
Companies claiming carbon neutrality through offsets should therefore prepare for greater scrutiny. Verification standards are tightening. Removals must be additional, permanent, and independently certified. Firms relying on lower-quality credits risk reputational damage and exclusion from tenders.
Furthermore, businesses with operations in multiple European cities face a patchwork of local climate policies. Some cities will move faster to secure removal capacity. Others will delay, creating inconsistent compliance burdens. Supply chain planning must account for this variation.
Demand reduction comes before removals in credible climate plans
The study makes clear that carbon removal should serve as a limited backstop, not a primary strategy. Cities must first reduce demand and accelerate decarbonisation in sectors where technology and economics already permit deep cuts. Removals should address only the small fraction of emissions that remain genuinely difficult to eliminate.
This principle applies equally to businesses. Companies should focus on operational efficiency, renewable energy procurement, and supply chain engagement before purchasing removal credits. Credible net-zero plans front-load emissions reductions and reserve removals for residual sources.
Several factors drive this approach. First, direct reductions deliver immediate climate benefits, whereas removals often involve long lead times and uncertain permanence. Second, removals carry higher costs per tonne than many abatement measures, particularly in energy and transport. Third, over-reliance on future removal capacity exposes organisations to delivery risk.
For UK SMEs, the message is straightforward. Address emissions at source. Invest in energy efficiency. Switch to electric vehicles where feasible. Engage suppliers on their emissions. Use removals only after these steps are complete. This sequence aligns with emerging procurement expectations and builds resilience against policy changes.
Five critical points from the European city analysis
- European cities plan to offset approximately 20% of their 2030 emissions using carbon removal, totalling around 61 million tonnes of CO₂.
- Current estimated removal capacity covers only 18% of the emissions cities intend to offset, leaving a substantial gap between ambition and delivery.
- Energy and transport account for 50% and 31% of residual emissions respectively, despite both sectors offering established decarbonisation pathways.
- Most city plans do not specify which removal methods will be used, when capacity will be available, or how volumes will be verified.
- Demand-side measures could reduce emissions by 40% to 80%, making them a more reliable strategy than unproven removal infrastructure.
How businesses should respond to uncertain removal capacity
Firms should treat carbon removal as supplementary, not foundational, to their climate strategies. The European city analysis demonstrates that even well-resourced public authorities struggle to translate removal ambitions into operational reality. Businesses face similar constraints.
Start by measuring your emissions accurately. Identify where reductions are technically and economically feasible. Focus investment on these areas first. Energy procurement offers one of the quickest wins for many businesses. Switching to renewable electricity contracts reduces Scope 2 emissions immediately. Similarly, energy efficiency improvements cut costs while lowering emissions.
Transport presents another priority area. Electric vehicle adoption continues to accelerate, with total cost of ownership now favourable for many use cases. Meanwhile, route optimisation and modal shift can deliver emissions cuts without capital investment. These measures also improve resilience against future fuel price volatility.
Supply chain emissions require longer-term engagement. Work with key suppliers to understand their decarbonisation plans. Prioritise those making genuine progress. Consider contractual requirements for emissions reporting and reduction targets. This approach builds supply chain resilience while addressing Scope 3 emissions.
Only after pursuing these direct reductions should businesses consider carbon removal credits. When purchasing removals, apply rigorous quality criteria. Look for third-party verification, additionality guarantees, and permanence assurances. Avoid credits from projects that would have proceeded regardless of carbon finance.
Procurement standards will tighten as cities confront delivery gaps
The gap between planned and available removal capacity will force cities to recalibrate their climate strategies. This recalibration will flow through to procurement requirements. Businesses should anticipate stricter criteria for supplier emissions, verified reductions, and audit trails.
Public sector buyers increasingly require carbon reporting as a condition of tender participation. PPN 06/21 already mandates this for large contracts. However, thresholds may lower as cities seek emissions cuts across their entire supply base. SMEs that establish reporting systems now will find themselves better positioned when requirements expand.
Moreover, buyers will likely favour suppliers demonstrating operational emissions reductions over those relying primarily on offsets. This preference reflects the same principle driving city-level policy: direct cuts are more credible than uncertain future removals. Firms with strong efficiency records, renewable energy contracts, and supply chain engagement will gain competitive advantage.
Businesses should also monitor local climate policies in areas where they operate or supply. Cities will adopt varying approaches as they confront removal capacity shortfalls. Some may tighten building energy standards. Others might restrict high-emission vehicles. Understanding these local variations helps businesses plan investments and manage compliance risk.
Where to find authoritative guidance on carbon removal and city climate plans
The Potsdam Institute for Climate Impact Research published the analysis of European city climate plans, with findings detailed in Nature Climate Change. This research provides the underlying data on removal capacity gaps and sectoral emissions profiles.
The European Commission's Joint Research Centre has issued guidance on carbon removal for cities, including a summary for decision makers. This guidance clarifies how cities should account for in-boundary removals versus purchased credits. It also sets out quality criteria for removal projects.
UK businesses seeking guidance on carbon reporting and reduction strategies should consult government resources on net zero and procurement policy notes. Additionally, our compliance support helps businesses navigate carbon reporting requirements and prepare for evolving procurement standards.