Brussels: The European Commission is set to propose that carbon credits purchased from other countries can count towards the European Union’s 2040 climate target, a Commission document seen by Reuters indicates. The Commission is expected to propose a legally binding EU climate target for 2040 on July 2.
The EU executive had initially envisioned a 90% net emissions reduction against 1990 levels. However, in recent months, it has sought to introduce more flexibility into this objective, responding to resistance from member states like Italy, Poland, and the Czech Republic, who are concerned about the financial implications.
An internal Commission summary of the upcoming proposal, reviewed by Reuters, states that the EU would be permitted to utilize “high-quality international credits” from a UN-backed carbon credits market to achieve 3% of the emissions cuts required for the 2040 goal. The document specifies that these credits would be introduced gradually from 2036. Subsequent EU legislation would define the origin and quality criteria these credits must meet, along with detailed procedures for their purchase.
This strategic move would effectively alleviate the burden of emissions cuts—and the associated investments—required from European industries to meet the 90% reduction target. For the portion of the target met by credits, the EU would acquire “credits” from projects that reduce CO2 emissions abroad—for instance, forest restoration initiatives in Brazil—rather than exclusively reducing emissions within Europe.
Advocates argue that these credits are a vital mechanism for raising funds for CO2-cutting projects in developing nations. However, recent scandals have highlighted instances where some credit-generating projects failed to deliver the claimed climate benefits.
The document further indicates that the Commission will introduce additional flexibilities to the 90% target. Brussels aims to manage opposition from governments that are grappling with funding the green transition alongside other priorities, such as defense, and from industries that claim ambitious environmental regulations harm their competitiveness.
These flexibilities include integrating credits from projects that actively remove CO2 from the atmosphere into the EU’s carbon market. This would allow European industries to purchase these credits to offset some of their own emissions. The draft proposal would also grant countries more flexibility on which sectors within their economy bear the primary responsibility for achieving the 2040 goal, “to support the achievement of targets in a cost-effective way.”
A Commission spokesperson declined to comment on the forthcoming proposal, emphasizing that it could still undergo changes before its publication next week. Both EU member states and the European Parliament will need to negotiate the final target and have the authority to amend the Commission’s proposal.
