Published by Global Banking & Finance Review®
Posted on April 7, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleThe EU is considering using international carbon credits to meet its 2040 climate goals, potentially easing domestic CO2 reduction efforts.
By Kate Abnett
BRUSSELS (Reuters) -The European Commission is considering counting international carbon credits towards its next climate target, a move that could weaken the CO2-cutting efforts it demands from domestic industries, sources familiar with the matter told Reuters.
The idea is among options being discussed by EU climate commissioner Wopke Hoekstra with the bloc's member countries and lawmakers, some of whom oppose an EU 2040 climate target to cut emissions by 90%, which the Commission had initially planned to propose.
The Commission missed a deadline to publish the goal last month, and is facing political pushback against the EU's green agenda, as climate change competes with other political priorities including defence. Some governments and lawmakers also argue EU green rules are hurting domestic industries reeling from U.S. tariffs and cheap imports.
Five sources familiar with the discussions said the Commission is assessing options including setting a 2040 emissions-cutting target for domestic industries which is lower than 90%, and letting countries buy international carbon credits to make up the rest.
That would mean EU countries could buy credits from projects that reduce CO2 emissions abroad - for example, forest restoration in Brazil - and count those emission reductions towards the EU goal.
The options the Commission is exploring were previously reported by Politico.
A Commission spokesperson declined to comment on whether it is considering adding international carbon credits to the EU target.
The move would be a u-turn for the EU, whose other climate targets are met by domestic efforts only.
Hoekstra said last week that a 90% emissions cut is still the Commission's "starting point" in talks on the 2040 goal - which he said he now plans to propose before summer.
"We are sensitive to requests for a bit of pragmatism," Hoekstra told reporters. He declined to comment on whether he was exploring flexibilities for the target.
The 2040 climate goal needs approval from EU countries and the European Parliament.
CREDIBILITY CONCERNS
Countries have been developing a U.N.-backed global market to trade carbon credits - seen by proponents as a way to fund CO2-cutting projects in developing nations.
However, CO2 credits have faced multiple scandals, where credit-generating projects were found to not be delivering the climate benefits they claimed.
Linda Kalcher, executive director of think-tank Strategic Perspectives, urged caution to address this risk.
"The list of scandals linked to international credits is long: fraud, lack of environmental integrity and the drastic collapse of the (EU) CO2 price," Kalcher said.
The EU banned international credits from its carbon market in 2013, after a flood of cheap credits contributed to a drop in the EU's carbon price.
Countries' efforts to launch a U.N.-backed carbon market aim to address such concerns about credibility, by introducing stricter safeguards so credits reliably deliver the climate benefits they claim.
Others suggested the move could strengthen the EU's hand in international climate negotiations with developing countries whose CO2 credit-generating projects could receive EU support.
"In my opinion, the countries at the other end of the negotiations would welcome this, because they are badly in need of climate finance," said Andrei Marcu, executive director of the ERCST think-tank.
(Reporting by Kate Abnett and Philip Blenkinsop; Editing by Emelia Sithole-Matarise)
The EU's consideration of international carbon credits to meet its 2040 climate goals.
To potentially ease the CO2 reduction demands on domestic industries.
Concerns include credibility issues and past scandals involving carbon credits.
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