The European Commission plans to propose allowing carbon credits purchased from other countries to count towards the European Union’s 2040 climate target, according to a document reviewed by Reuters.
The commission is scheduled to present a legally binding EU climate target for 2040 on July 2.
Initially, the EU executive aimed for a 90% net emissions reduction compared to 1990 levels, but has increasingly sought to make this objective more adaptable.
This change comes in response to concerns from governments, including Italy, Poland, and the Czech Republic, about the associated costs.
The document indicates that these credits will be gradually introduced starting in 2036, with additional EU legislation to specify the origin and quality criteria for the credits, as well as the details regarding their purchase.
This adjustment would effectively reduce the emissions cuts—and the necessary investments—from European industries required to achieve the 90% reduction target.
For the portion of the target addressed by credits, the EU would purchase “credits” from initiatives that decrease CO2 emissions internationally—such as forest restoration in Brazil—rather than making emissions reductions domestically.
Supporters argue that these credits are essential for funding CO2 reduction projects in developing countries.
However, recent controversies have revealed that some credit-generating initiatives did not produce the climate benefits they promised.
The document states that the commission will incorporate additional flexibilities into the 90% target as Brussels seeks to mitigate opposition from governments facing challenges in financing the green transition alongside other priorities, such as defense and industry—who argue that ambitious environmental regulations hinder their competitiveness.
Proposed measures include integrating credits from projects that capture CO2 from the atmosphere into the EU’s carbon market, allowing European industries to purchase these credits to offset some of their own emissions, according to the document.
The draft would also provide countries with more leeway regarding which sectors within their economies contribute to meeting the 2040 goal, “to support the achievement of targets in a cost-effective manner.”
A spokesperson for the commission declined to comment on the forthcoming proposal, which may still undergo changes prior to its release next week.
Final negotiations on the target will be held between EU countries and the European Parliament, which may amend the European Commission’s proposal.
