The European Commission will allow member states to use a small share of international carbon credits to meet the bloc’s 2040 emissions reduction target, according to a draft proposal. Beginning in 2036, up to 3% of the EU’s emissions cuts—based on 1990 levels—may come from funding carbon-reducing projects in poorer countries.
The Commission is set to unveil its long-awaited 2040 climate target on Wednesday, which aims to cut greenhouse gas emissions by 90% compared to 1990 levels. While the majority of reductions must be achieved domestically, the draft allows for limited outsourcing via high-quality international credits under Article 6 of the Paris Agreement, starting in the second half of the decade.
The proposal has already faced criticism, particularly from the EU’s own scientific advisers, who argue that relying on external offsets could weaken domestic climate action. Both the EU’s 2030 and 2050 climate targets require domestic-only reductions.
To address these concerns, the Commission has excluded the use of such credits in the EU Emissions Trading System (ETS), a move aimed at preserving carbon price signals designed to drive industrial decarbonization. “These international credits should not play a role for compliance in the EU carbon market,” the draft states.
The carbon credit provision is one of 18 measures outlined in the draft to make the 2040 target more politically acceptable amid growing opposition from member states. Other elements include potentially opening the ETS to permanent CO₂ removals, such as direct air capture, and increasing sectoral flexibility.
Despite pushback from countries like France, Poland, and Hungary, the Commission argues that a 90% reduction is necessary to ensure long-term competitiveness, resilience, and alignment with the Paris Agreement. The draft emphasizes the need for future legislation to establish strict criteria governing the origin, quality, and use of international credits.
The Commission’s final climate law amendment will be closely watched as the EU navigates complex political and environmental trade-offs in shaping its post-2030 climate policy.
