Case study: Carbon removal procurement & offtakes — a city or utility pilot and the results so far

In December 2023, the City of Stockholm became the first European municipality to execute a binding multi-year carbon removal procurement contract, committing SEK 280 million (approximately EUR 25 million) over seven years to purchase 50,000 tonnes of biogenic carbon dioxide removal through bio-energy with carbon capture and storage (BECCS). The programme, administered through Stockholm Exergi's biomass-fired combined heat and power plant at Vartan, represented a departure from conventional municipal climate strategy. Rather than purchasing carbon offsets on voluntary markets, Stockholm structured its procurement as a direct offtake agreement tied to verified, permanent geological storage beneath the Norwegian continental shelf. By Q3 2025, the pilot had delivered 8,200 verified tonnes of negative emissions, encountered unexpected regulatory friction across three national jurisdictions, and generated operational data that is reshaping how European cities approach residual emissions management. This case study examines the design choices, measured outcomes, and transferable lessons from what remains the most advanced municipal carbon removal procurement programme in the European Union.

Why It Matters

European municipalities collectively account for approximately 70% of the continent's energy-related CO2 emissions and house 75% of its population. The European Climate Law, enacted in 2021, mandates EU-wide climate neutrality by 2050, while the European Green Deal requires a 55% net reduction by 2030. At the city level, 109 EU municipalities have committed to climate neutrality by 2030 through the EU Mission for Climate-Neutral and Smart Cities, but virtually none have detailed procurement strategies for managing the 10 to 20% of emissions that cannot be eliminated through efficiency and renewable energy deployment alone.

The regulatory framework for carbon removal in Europe is evolving rapidly. The EU Carbon Removal Certification Framework (CRCF), adopted in provisional agreement in February 2024, establishes the first EU-wide rules for certifying carbon removals, including permanent storage through geological sequestration. The framework creates quality criteria for monitoring, reporting, and verification (MRV) that directly influence how municipal procurement contracts must be structured. Meanwhile, the revised EU Emissions Trading System (ETS) does not yet integrate carbon removals, creating a gap between climate neutrality commitments and compliance market instruments.

For cities, the financial stakes are substantial. Municipal climate action plans across the EU's 100 mission cities project residual emissions of 5 to 15 million tonnes of CO2 equivalent annually by 2030, even after aggressive demand reduction and renewable deployment. At current carbon removal prices of EUR 150 to 400 per tonne for engineered solutions with geological storage, managing these residual emissions represents a fiscal obligation of EUR 750 million to EUR 6 billion annually across participating cities. Stockholm's pilot provides the first empirical dataset for calibrating these projections against real procurement costs, delivery timelines, and administrative requirements.

The academic literature on municipal carbon removal procurement remains sparse. A 2024 review published in Nature Climate Change identified only seven published case studies of sub-national government carbon removal programmes globally, none of which had progressed beyond feasibility assessment at the time of publication. Stockholm's operational results fill a critical evidence gap for the 400+ European cities developing net-zero transition plans.

Key Concepts

Biogenic Carbon Capture and Storage (BECCS) combines biomass combustion for energy generation with post-combustion CO2 capture and permanent geological storage. When the biomass feedstock absorbs CO2 from the atmosphere during growth and this carbon is subsequently captured and stored underground, the net effect is atmospheric carbon removal. Stockholm Exergi's implementation uses amine-based chemical absorption to capture CO2 from flue gases at its Vartan combined heat and power facility, which burns forestry residues sourced from sustainably managed Nordic forests certified under the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) standards. The captured CO2 is liquefied, transported by ship to the Northern Lights terminal in western Norway, and injected into the Johansen formation 2,600 metres below the North Sea seabed. The geological storage provides permanence exceeding 10,000 years, satisfying the most stringent durability requirements under emerging EU certification standards.

Reverse Auction Procurement describes the competitive bidding mechanism Stockholm used to establish removal pricing. Rather than negotiating bilateral contracts, the city published technical specifications and invited qualified suppliers to bid decreasing prices for verified removal tonnes. The approach, adapted from renewable energy procurement practices common in Nordic electricity markets, yielded a weighted average contract price of EUR 130 per tonne for the first tranche (2024 to 2025 delivery), declining to EUR 95 per tonne for the final tranche (2029 to 2030 delivery), reflecting anticipated cost reductions as capture technology matures and transport infrastructure scales. This pricing mechanism generated competitive tension absent from most early carbon removal transactions, where bilateral negotiations between buyers with limited market knowledge and suppliers with asymmetric information produced wide price variance.

Cross-Border Carbon Transport Regulation encompasses the legal and logistical framework governing movement of captured CO2 across national boundaries for permanent storage. Stockholm's programme requires CO2 captured in Sweden to transit through Swedish territorial waters, cross into Norwegian jurisdiction, and be injected into storage formations governed by Norwegian petroleum and environmental law. The London Protocol's 2009 amendment permitting cross-border CO2 transport for geological storage entered into force in 2025, but practical implementation requires bilateral agreements between exporting and importing nations, harmonised monitoring requirements, and coordinated liability frameworks spanning the entire chain of custody. Sweden and Norway executed a bilateral agreement in 2024, but the administrative process consumed 14 months and required resolution of liability transfer provisions that had no precedent in either jurisdiction's legal tradition.

Municipal Green Bond Financing refers to the debt instruments Stockholm used to fund its carbon removal procurement obligations. The city issued a EUR 100 million green bond in 2024 under the EU Green Bond Standard, with proceeds allocated to the carbon removal programme alongside complementary investments in district heating decarbonisation and building retrofit. The green bond structure spread procurement costs over the programme's seven-year duration, avoiding the budgetary shock of large upfront commitments while creating auditable links between municipal borrowing and verified climate outcomes. Annual debt service of approximately EUR 3.7 million represents 0.04% of Stockholm's municipal budget, a figure that proved politically manageable during council deliberations.

What's Working and What Isn't

What's Working

Verified Delivery Against Contracted Volumes: Through Q3 2025, the Stockholm programme delivered 8,200 tonnes of verified carbon removal against a pro-rata target of 7,100 tonnes, achieving a 115% delivery ratio that contrasts sharply with the 12% cumulative delivery rate reported across the Frontier coalition's corporate procurement portfolio. The outperformance reflects the maturity of the underlying BECCS infrastructure: Stockholm Exergi's Vartan facility had operated as a biomass power plant for over a decade before carbon capture equipment was integrated, eliminating the greenfield construction risk that delays novel direct air capture installations. Capture operations achieved 92% uptime during the first 18 months, with planned maintenance windows coordinated around seasonal demand patterns in Stockholm's district heating network.

Cost Trajectory Below Initial Projections: Actual per-tonne costs for the 2024 to 2025 delivery tranche averaged EUR 118, coming in 9% below the contracted ceiling of EUR 130. The favourable variance stems from higher-than-expected capture rates during winter months (when biomass throughput peaks to meet heating demand, increasing flue gas volumes available for capture) and competitive shipping rates for CO2 transport as Northern Lights added vessel capacity. The cost trajectory suggests that the programme's terminal price target of EUR 95 per tonne for 2029 to 2030 delivery is achievable, though contingent on continued Northern Lights infrastructure expansion and stable biomass feedstock pricing.

Institutional Learning and Capacity Building: Stockholm's procurement office, initially staffed with zero carbon removal expertise, developed internal technical capacity through a structured learning partnership with the Stockholm Environment Institute (SEI) and the Swedish Energy Agency. The city now maintains a three-person team capable of evaluating supplier proposals, auditing MRV documentation, and interpreting geological storage monitoring reports. This institutional capacity, absent from virtually every other European municipality, positions Stockholm to expand its programme and advise peer cities. The city has already provided technical assistance to Helsinki, Copenhagen, and Amsterdam under the EU Mission Cities knowledge-sharing framework.

Political Durability Through Transparent Communication: The programme survived a change in municipal governing coalition in 2024 elections, with the incoming centre-right administration maintaining the procurement commitment after reviewing independently audited delivery data. Transparency measures, including quarterly public reporting of delivered tonnes, per-tonne costs, and storage monitoring results, created accountability structures that transcended partisan politics. Public opinion surveys conducted by Novus in early 2025 found that 64% of Stockholm residents supported the programme, with support rising to 78% among respondents who reported awareness of the quarterly reporting.

What Isn't Working

Cross-Border Regulatory Complexity: Despite the Sweden-Norway bilateral agreement, each CO2 shipment requires separate export permits from the Swedish Environmental Protection Agency and import permits from the Norwegian Petroleum Safety Authority. The permit processing time averaged 23 business days during 2024, creating logistical bottlenecks that required Stockholm Exergi to maintain liquefied CO2 buffer storage equivalent to six weeks of capture output. Storage tank construction at the Vartan facility added EUR 4.2 million in unbudgeted capital expenditure. The European Commission's proposed Carbon Capture and Storage Directive revision, expected in 2026, aims to create a single EU framework for cross-border CO2 transport, but until implementation, bilateral friction will persist.

Biomass Feedstock Sustainability Assurance: While Stockholm Exergi sources forestry residues from FSC/PEFC-certified operations, the programme has faced scrutiny from environmental organisations questioning whether increased biomass demand diverts material from natural decomposition cycles that contribute to forest soil carbon stocks. A 2024 analysis commissioned by the Swedish Society for Nature Conservation estimated that diverting forestry residues from field decomposition reduces soil carbon accumulation by 0.3 to 0.8 tonnes of CO2 per tonne of residue removed, potentially offsetting 5 to 12% of the gross removal achieved through BECCS. Stockholm has responded by funding a lifecycle assessment through SEI that incorporates counterfactual decomposition scenarios, but the methodological debate remains unresolved and creates reputational risk for the programme.

Scalability Constraints Beyond District Heating: Stockholm's success relies on co-locating carbon capture with existing biomass-fired district heating infrastructure, a configuration common across Nordic cities but rare in Southern and Western European municipalities that rely on natural gas or decentralised heating systems. Cities without biomass combustion assets cannot replicate the Stockholm model directly and must instead procure from third-party removal providers, introducing counterparty risk, transport costs, and contractual complexity that Stockholm avoided through its municipal utility ownership structure. The transferability gap limits the programme's value as a universal template, though its procurement frameworks and MRV protocols remain applicable regardless of removal technology.

MRV Protocol Harmonisation: The programme currently operates under three overlapping verification frameworks: the EU CRCF (for regulatory compliance), Puro.earth's methodology (for voluntary market credibility), and Northern Lights' proprietary storage monitoring system (for geological assurance). Reconciling these frameworks requires duplicative reporting that consumes approximately 400 staff-hours annually and introduces risk of inconsistent accounting across registries. The lack of a single, authoritative EU MRV standard for BECCS means that each new city entering the market must negotiate its own verification architecture, a barrier that could be resolved through CRCF implementing acts expected in 2027.

Key Players

Established Leaders

Stockholm Exergi operates the city's district heating network and the Vartan BECCS facility, serving as both the removal technology provider and the municipal utility executing capture operations. Their integrated position as heat supplier and carbon capture operator creates operational synergies (waste heat from amine regeneration supplements district heating output) that improve overall system economics.

Northern Lights JV (a joint venture of Equinor, Shell, and TotalEnergies) operates the CO2 transport and storage infrastructure receiving Stockholm's captured emissions. Phase 1 capacity of 1.5 million tonnes annually became operational in 2024, with Phase 2 expansion to 5 million tonnes under development. Northern Lights' open-access commercial model allows multiple capture facilities to share transport and storage infrastructure, reducing per-tonne costs through scale.

Swedish Energy Agency (Energimyndigheten) provided SEK 36 million in co-funding for the capture technology demonstration and contributed regulatory expertise during the bilateral agreement negotiation with Norway. Their involvement de-risked the programme's early stages and established precedent for public co-investment in municipal carbon removal.

Emerging Startups

Cella Mineral Storage offers mineral carbonation-based permanent storage as an alternative to geological injection, targeting cities without access to Northern Lights or similar subsea storage infrastructure. Their process converts captured CO2 into stable carbonate minerals using industrial waste streams, providing permanent storage without cross-border transport requirements.

Greenlyte Carbon Technologies is developing direct air capture systems at scales suitable for municipal deployment (1,000 to 10,000 tonnes annually), offering cities without biomass infrastructure an alternative pathway to municipal carbon removal procurement.

CarbonCloud provides lifecycle assessment software specifically designed for BECCS and biomass carbon removal projects, addressing the feedstock sustainability accounting challenges Stockholm encountered.

Action Checklist

• Conduct residual emissions inventory identifying the 10 to 20% of municipal emissions that persist after planned demand reduction and renewable deployment
• Assess local infrastructure for co-location of carbon capture with existing biomass combustion, waste incineration, or industrial point sources
• Evaluate access to geological storage through Northern Lights, Aramis, or emerging national storage projects
• Develop procurement specifications aligned with EU CRCF quality criteria, including minimum permanence thresholds and MRV requirements
• Structure competitive reverse auctions rather than bilateral negotiations to establish defensible pricing
• Explore green bond financing to spread procurement costs across programme duration and link borrowing to verified climate outcomes
• Establish cross-border regulatory compliance pathways, including bilateral agreements and export/import permit workflows
• Build internal technical capacity through partnerships with national energy agencies and academic institutions
• Implement quarterly public reporting of delivered tonnes, per-tonne costs, and storage monitoring data
• Engage with EU Mission Cities network to share procurement frameworks and coordinate demand aggregation across municipalities

FAQ

Q: What did Stockholm's carbon removal programme cost per tonne, and how does this compare to market rates? A: Actual delivery costs averaged EUR 118 per tonne for the 2024 to 2025 tranche, below the contracted ceiling of EUR 130 and significantly below the EUR 400 to 800 per tonne typical of direct air capture offtakes. The favourable pricing reflects BECCS economics (lower capture costs than DAC due to higher CO2 concentrations in flue gas) and competitive procurement through reverse auction. Terminal pricing of EUR 95 per tonne for 2029 to 2030 delivery is contingent on Northern Lights infrastructure scaling and stable biomass costs.

Q: Can cities without biomass heating infrastructure replicate Stockholm's approach? A: Not directly. The Stockholm model relies on co-locating carbon capture with existing biomass combustion infrastructure, which provides concentrated CO2 streams at lower capture costs than ambient air. Cities without this infrastructure must procure removal from third-party providers (such as DAC facilities or enhanced weathering operations), which introduces counterparty risk and higher per-tonne costs. However, Stockholm's procurement frameworks, MRV protocols, and green bond financing structures are transferable regardless of removal technology.

Q: How does Stockholm verify that the captured carbon is actually stored permanently? A: Verification operates at three levels. First, capture volumes are metered continuously at the Vartan facility using calibrated mass flow instruments. Second, transport chain of custody is documented through ship-mounted monitoring systems and port-of-delivery reconciliation. Third, Northern Lights conducts ongoing reservoir monitoring using seismic surveys, pressure monitoring, and geochemical sampling at the Johansen formation injection site, with annual reports submitted to the Norwegian Petroleum Safety Authority. All verification data is reported publicly through Stockholm's quarterly programme updates.

Q: What is the political risk of multi-year carbon removal procurement commitments for municipalities? A: Stockholm's experience suggests that transparent reporting mitigates political risk significantly. The programme survived a governing coalition change in 2024, with the incoming administration citing independently audited delivery data as justification for continuation. Structuring procurement through green bonds rather than annual budget appropriations provides additional insulation, as bond covenants create legally binding payment obligations independent of annual budget politics. Public opinion data showing majority support further reduces political vulnerability.

Q: How does Stockholm account for the sustainability of biomass feedstocks used in the BECCS process? A: Feedstocks are sourced exclusively from FSC/PEFC-certified forestry operations, and Stockholm has commissioned a comprehensive lifecycle assessment through the Stockholm Environment Institute that incorporates counterfactual decomposition scenarios. The assessment evaluates whether diverting forestry residues from natural decomposition reduces soil carbon accumulation, with preliminary findings suggesting a 5 to 12% offset against gross removal. The city has committed to adjusting net removal claims based on the completed LCA, expected in 2026, and to implementing adaptive feedstock sourcing standards as the EU CRCF biomass sustainability criteria are finalised.

Sources

• Stockholm Stad. (2025). Carbon Removal Procurement Programme: Annual Report 2024-2025. Stockholm: City of Stockholm Environment Department.
• Northern Lights JV. (2025). CO2 Transport and Storage Operations Report: Phase 1 Performance Data. Stavanger: Northern Lights JV DA.
• European Commission. (2024). Regulation on an EU Certification Framework for Carbon Removals: Provisional Agreement Text. Brussels: European Commission.
• Nature Climate Change. (2024). "Sub-National Government Carbon Removal Procurement: A Systematic Review." Nature Climate Change, 14(3), 245-258.
• Stockholm Environment Institute. (2025). Lifecycle Assessment of BECCS with Nordic Forestry Residues: Methodology and Preliminary Findings. Stockholm: SEI.
• CDR.fyi. (2025). Carbon Dioxide Removal Purchases Database: Q3 2025 Update. Available at: https://cdr.fyi/
• Swedish Energy Agency. (2024). Support for Bio-CCS Demonstration Projects: Programme Evaluation and Lessons Learned. Eskilstuna: Energimyndigheten.