On July 2, 2025, the European Commission proposed a 90% emissions reduction target by 2040, setting a key milestone toward achieving climate neutrality by 2050. The proposal introduces limited flexibility by allowing the use of international carbon credits under Article 6 of the Paris Agreement, capped at 3% of the EU’s 1990 net emissions, equivalent to around 140 MtCO₂. While this mechanism could ease political approval and channel climate finance abroad, it also risks raising net domestic emissions by up to 30% if reductions are outsourced to other regions.

The debate highlights both opportunities and risks. High-quality credits could strengthen EU leadership in shaping global standards, scale up international action, and support vulnerable countries. Yet, concerns include overcrediting, market fragmentation, weakened ambition, and reputational harm. To safeguard integrity, experts stress strict criteria on additionality, permanence, leakage prevention, human rights, and robust governance with transparent MRV systems. Ultimately, strong safeguards will determine whether carbon credits enhance EU climate leadership or undermine its credibility.

Link:
https://eccoclimate.org/carbon-credits-risks-and-opportunities-for-european-climate-leadership/