Latest News

EU adds international CO2 credits as part of next climate goal

A draft of the proposal revealed that the European Commission would propose on Wednesday an EU climate goal for 2040, which for the first will allow countries to utilize carbon credits from developing countries to meet a small share of their emission goals.

The draft seen by said that the European Union executive will propose a legally binding target to reduce net greenhouse gas emission by 90% by 2040 from 1990 levels. This is to keep the EU on track to achieve its core climate goal of reaching net zero emissions in 2050.

The draft EU proposal, however, includes flexibility that will soften the 90% emission target for European industry, following pressure from France, Germany and other governments, including Italy, Poland, and the Czech Republic.

Prior EU emission targets were based solely on domestic emission reductions.

The draft reflects Germany's public position that up to three percentage points of 2040 targets can be covered through carbon credits purchased from other countries via a U.N. supported market. This reduces the effort required for domestic industries.

The draft stated that the carbon credits will be phased-in from 2036. "EU will propose legislation setting robust and high integrity standards and criteria, as well as conditions on origin, timing, and use of these credits," it said.

The report said that countries would be given more flexibility in choosing the sectors of their economy that contribute most to the 2040 target.

Climate change has made Europe one of the fastest-warming continents in the world. A heatwave that hit the continent this week caused wildfires, disruption and chaos. But Europe's aggressive policies to combat the temperature increase have stoked the tensions among the 27 member bloc.

The European Commission's climate agenda is a way for the European Commission to improve Europe’s competitiveness and safety. However, some governments and legislators say that industries already struggling with high energy prices and U.S. tariffs cannot afford stricter emission rules.

The draft stated that "Decarbonisation not only is crucial for the environment, but it can also be a key driver of growth in the economy when integrated with policies on industrial, trade, and competition."

Un spokesperson for the Commission declined to comment on this draft which may change before publication.

Carbon credits can be generated through projects that reduce CO2 emission abroad, such as forest restoration projects in Brazil. These carbon credits then raise money for these projects. Investigations have revealed that some credits did not deliver the claimed environmental benefits.

The EU's Climate Science Advisors oppose counting them towards 2040 and say that spending money on carbon credits from abroad would divert investment away from local industries.

EU legislators and countries must agree on the 2040 target. This lawmaking process may take many years, but by mid-September the EU must submit to the U.N. its new 2035 climate goal - which should be derived directly from the current 2040 target - as the Commission had stated. (Reporting and additional reporting by Michel Rose, editing by Barbara Lewis.)

(source: Reuters)