Next EU climate target to allow carbon offsets from 2036, draft shows

BRUSSELS — The European Commission will permit countries to outsource a portion of their climate efforts to poorer countries from 2036, according to a draft proposal obtained by POLITICO.

The EU executive plans to present the bloc’s 2040 emissions-reduction target on Wednesday after several months of delay. The goal will be set at 90 percent below 1990 levels, the draft amendment to the European Climate Law shows. 

But as POLITICO reported in mid-June, the Commission intends to meet up to 3 percentage points of the new target with international carbon credits, despite fierce criticism from its own scientific advisers. This plan aligns with Germany’s position on the 2040 goal. 

Such credits will allow the EU to pay for emissions-slashing projects in other, usually poorer countries, and count the resulting greenhouse gas reductions toward its own 2040 target, rather than the climate goals of the country hosting the project. The draft proposal envisages using them only in the second half of the decade.

“Starting from 2036, a possible limited contribution towards the 2040 target of high-quality international credits under Article 6 of the Paris Agreement” — global rules governing carbon credits — “of no more than 3% of 1990 EU net emissions,” the draft states.

The Commission aims to propose legislation regulating such credits at an unspecified date, the draft adds. “Their specific role and deployment would need to be based on a thorough impact assessment and subject to the development of Union law setting robust and high integrity criteria and standards, and conditions on origin, timing and use of such credits.”

Critics, including the bloc’s scientific advisers, warn that relying even just in part on international credits risks slowing the EU’s climate efforts at home. The EU’s existing 2030 and 2050 targets must be met solely through domestic measures.

But the proposal specifically excludes the possibility of integrating credits in the EU’s carbon market, an option that some experts feared could tank the bloc’s CO2 price, which is meant to incentivize companies to reduce their emissions.

“These international credits should not play a role for compliance in the EU carbon market,” the draft reads. 

Carbon credits are only one of 18 “elements” — effectively, promises to make the target more palatable to skeptical governments — that the Commission plans to integrate into the EU’s post-2030 climate policy framework, according to the draft, which is dated June 27.

French President Emmanuel Macron joined Poland and Hungary in demanding delays. | Pool Photo by Benoit Tessier via EPA

Others include opening the bloc’s carbon market to permanent CO2 removals — for example through capturing carbon directly from the air, a method as yet unavailable at scale — as well as “enhanced flexibility across sectors.”

The remaining promises to EU countries are considerably more vague, with the Commission vowing to pay attention to everything from scientific advice and social impacts to cost-effectiveness and economic competitiveness in its policy framework for 2040.

The 2040 target has been met with significant pushback from governments, with many sending Brussels long lists of conditions for supporting the goal. Last week, French President Emmanuel Macron joined Poland and Hungary in demanding delays.

The Commission in its draft proposal insists that “a 90% target puts the EU on the pathway which provides the greatest overall benefits in terms of competitiveness, resilience, independence, autonomy, a just transition and ensuring that the EU meets its commitments under the Paris Agreement.”