With reports circulating that the European Commission is considering watering down and applying loopholes to its forthcoming 2040 climate target, Carbon Market Watch warns that reckless reliance on Article 6 credits and carbon removals is not a replacement for domestic emissions reductions commitments

More than a year since the release of the European Commission Communication on the 2040 target, the official legislative proposal to enshrine this urgently required EU climate objective into law has not yet seen the light. 

Even more concerning are reports that the European Commission is considering backsliding on the ambition of the future target.

Apparently, EU lawmakers are exploring four potential loopholes to weaken the target under the guise of “greater flexibility”. Under consideration are suggestions that include postponing climate action until the latter half of the 2030’s, allowing for more flexibility between EU sectors, or relying on international offsets and additional carbon removals to somehow fill the gap caused by EU inaction. 

Such a substantial retreat from an already inadequate target is deeply concerning. It risks compromising the integrity of the climate goal and damaging the EU’s perceived credibility as a global climate leader.

Action must remain in-house

Opening the door to the use of international credits from United Nations carbon markets, as is reported, is utterly irresponsible.

The European Commission must remain guided by the reality of climate science and what is written in its own laws, which prioritise domestic (internal) emission reductions over the use of international carbon offsets. 

The European Scientific Advisory Board on Climate Change (ESABCC) recommended that the EU slash its emissions by 90-95% by 2040 through domestic action only. The European Climate Law, as well as the EU’s climate target submitted to the United Nations under the Paris Agreement, refers exclusively to domestic climate action. It does not mention meeting the objective by purchasing overseas carbon credits.

Repeating past mistakes

The EU’s past experience with integrating international carbon credits into its Emissions Trading System (ETS) proved disastrous. 

Prior to 2020, the EU allowed 1.6 billion international credits to enter into the EU ETS, crashing the carbon price for almost a decade. This resulted in severely slowing down domestic climate action, while depriving EU member states of billions in Euros due to diminished ETS auctioning revenues. 

The purchasing of carbon credits from abroad meant there was less finance directed towards essentially required innovation and cleaner investments in the EU. It would be foolish to ignore these hard-learned lessons, and intentionally repeat mistakes from the past. 

Article 6 carbon credits are not the answer

The rules for trading carbon credits under the UN’s Article 6 lack sufficient provisions to ensure real climate benefits. These credits carry a significant risk of failing to represent real, additional, or permanent emission reductions. 

Article 6 credits are proving problematic due to documented issues including over-estimation and reliability, which significantly risk not delivering ‘additional’ climate action. This includes the most recent batch of Clean Development Mechanism credits that will troublingly be allowed to be re-labelled as Article 6 credits despite well known flaws. Their use could allow the EU to claim progress toward its target, yet global emissions may actually increase if the credits lack additionality.

Moreover, a sudden reversal by the EU in favour of using international carbon credits would also jeopardise the bloc’s credibility and influence as a climate leader on the global stage. 

Throughout UN climate negotiations under the Paris Agreement, the EU long maintained its commitment to domestic climate action and even insisted on strong governance over international credits due to the associated risks. 

Changing tack and signaling the inclusion of offsets in the EU’s climate target would severely undermine trust in the EU at a time when renewed international climate leadership is critical. 

Removals cannot replace reductions

The prospect of an even greater dependence on carbon removals to reach the EU’s net 90% target would be at odds with science and raises serious feasibility and sustainability concerns. 

The recent ESABCC report gives crystal clear guidance on how carbon removals must be used in the EU: removals cannot substitute for slashing emissions and “any effort to scale them up should not deter the EU from accelerating investments to support drastic emissions reductions”.

An increased contribution of carbon removals would not only remove pressure from what is really needed – to urgently reduce emissions – but it also seems unworkable. The EU land carbon sink is rapidly shrinking, and several member states already expect to miss their national natural sinks targets for 2030, risking to fall well short of the EU-wide target by at least 13%. 

At the same time, the deployment of permanent removals is likely to be severely constrained –  there are uncertainties over technological readiness, risks related to scarce sustainable biomass, energy and water, and negative environmental and social impacts. High-quality and sustainable carbon removals will remain a finite resource that must be used responsibly. Betting on their development instead of reducing emissions in the first place is completely irresponsible and unjustified.

Instead of developing a proposal that relies more on carbon removals to compensate for continued emissions, the European Commission should rather clarify the role of removals towards achieving the net target for 2040 by setting separate targets for gross emissions, land-based sequestration and permanent removals, while maintaining a high ambition for the overall target. 

No time to waste

Delaying and weakening the EU’s 2040 climate target would be short-sighted and irresponsible. The European Commission would not only contradict previous commitments, but would also go against what is clearly demanded by science. Using international carbon offsets or carbon removals to meet future climate targets will fundamentally undermine necessary greenhouse gas emission reductions in the EU. 

Allowing large polluters to purchase cheap carbon offsets elsewhere amounts to a dangerous delay in eliminating fossil fuel consumption and the necessary transition to a fully renewable and competitive green economy in Europe. 

The planet can not afford the EU to step down as a climate leader at a time when some other parts of the world are backtracking.