· 3 min read
illuminem summarises for you the essential news of the day. Read the full piece on Carbon Credits or enjoy below:
🗞️ Driving the news: The European Commission is weighing a major shift in climate policy by considering the reintroduction of international carbon credits to help meet the EU’s 2040 emissions target
• This move would allow countries to support emission-reduction projects abroad—such as reforestation or renewable energy in developing nations—and count those toward their own targets
• The proposal, still under discussion, signals growing pressure to introduce more flexible pathways to meet the EU’s 90% emission reduction goal by 2040
🔭 The context: The EU previously banned international offsets after 2020 due to quality concerns and negative effects on domestic decarbonisation
• During the Kyoto Protocol era (2008–2020), over 1.6 billion international credits were used within the EU ETS, many of which were linked to integrity issues or failed climate benefits
• Article 6 of the Paris Agreement introduced stricter rules for international trading of carbon credits, aiming to restore credibility through transparency, avoidance of double counting, and better monitoring
🌍 Why it matters for the planet: Reintroducing international credits could ease financial pressures and unlock funding for mitigation in the Global South, potentially accelerating global climate action
• However, critics warn it may weaken incentives for EU countries to cut emissions at home—dampening investment in clean technologies and undermining long-term climate resilience
• The decision will shape both global perceptions of EU climate leadership and the credibility of carbon markets under Article 6
⏭️ What's next: The European Commission is expected to finalise and propose the 2040 climate target before summer
• Any inclusion of international credits would require approval from EU member states and the European Parliament, potentially triggering intensive negotiations
• If adopted, the policy could redefine EU climate strategy and influence the evolution of global carbon markets, especially in emerging economies seeking climate finance
💬 One quote: “Reckless reliance on Article 6 credits and carbon removals is not a replacement for domestic emissions reductions commitments.” – Carbon Market Watch
📈 One stat: Achieving the EU’s 2040 target would require approximately €660 billion annually in energy investments between 2031 and 2050—about 3.2% of the EU’s GDP
Click for more news covering the latest on carbon markets
