This article focuses on two areas of the European Unions's three-legged climate policy: the emissions trading and effort sharing sectors. The focus is on EU-level legislation, but examples of national frameworks where the EU's policy objectives are implemented are provided to highlight the practical implications of the legislation. The International Energy Agency has stated that carbon capture utilisation and storage (CCUS) will play an important role in reducing and removing CO₂ emissions. This issue is topical as negotiations on updating the EU's climate targets and associated legislation are just being finalised. Furthermore, the EU Commission is defining rules for synthetic fuel production and regulation for certification of CO₂ removals. EU policy favours utilising biogenic and atmospheric sources of CO₂ over fossil sources for producing synthetic fuels in the long term. Currently, there are more incentives to store captured carbon from fossil fuel plants than biomass plants as carbon capture, utilisation and storage provides fossil installations a means of avoiding payment of allowances under the EU's emissions trading system.