CCS outlook for European pulp mills 

Europe’s pulp mills spent two decades earning a quiet subsidy from the EU ETS: free allowances, calibrated to product benchmarks, that exceeded the fossil emissions they were meant to offset. From January 2026, the 95% biogenic exclusion strips that surplus from the mills that decarbonized furthest, while benchmark tightening pushes compliance costs up to eight-fold for the most fossil-exposed. At the same time, the ~40Mt of biogenic CO₂ the sector vents each year is drawing premium demand from corporate buyers of permanent carbon removal. This Fastmarkets Carbon preview report sets out why the sector’s carbon position is being repriced, and where carbon capture and storage converts that pressure into a revenue line. 

• The multi-billion EU ETS allocation surplus era, and why it’s ending in 2026 
• The 95% biogenic exclusion paradox: who loses free allocation, and why 
• An eight-fold EU ETS cost escalation for the most fossil-exposed mills 
• Europe’s ~40Mt of annual unpriced biogenic CO₂ — and the BECCS premium emerging around capturable volumes 
• Two cost curves and the competitive spread opening across European pulp 
• And much more.. 

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