Climate change

Report: EU to Add Carbon Credits for 2040 Climate Target

Published JUL 1 2025

Story

Above: A low-angle view of a forest with a CO2 reduction icon. Image credit: Unsplash

The Facts

The European Commission plans to propose a legally binding 2040 climate target, requiring a 90% reduction in net emissions compared to 1990 levels. The proposal is reportedly scheduled for release on Wednesday.
Global Banking And Finance Review
Argus Media
According to a draft document seen by Bloomberg News, the proposal would allow the EU to use high-quality international carbon credits from a U.N.-backed market to meet up to 3% of its emissions cuts toward the 2040 goal, with credits phased in starting from 2036.
Bloomberg.com
Reuters
ESG News
The carbon credits would come from projects that reduce CO2 emissions abroad, such as forest restoration in Brazil or tree planting initiatives in developing countries in Africa and Latin America.
Politico
guardian
The proposal reportedly responds to pushback from governments, including Italy, Poland, and the Czech Republic, which have expressed concerns about the cost and competitiveness impacts of ambitious climate measures.
Bloomberg.com
Global Banking And Finance Review
More than 130 environmental groups have expressed "extreme concern" over the proposals, arguing that the EU should meet its targets domestically rather than relying on carbon offsets from overseas.
Oeko
guardian
Argus Media
However, EU Climate Commissioner Wopke Hoekstra acknowledged past problems with worthless carbon credits but stated that developing countries show a "huge appetite" for carbon credit projects and that integrity certification would be essential.
Politico
guardian

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

Carbon credits offer a cost-effective means of meeting climate goals while channeling crucial financing to developing nations for emissions-reducing projects. The planet doesn't care where emissions are removed from the air, and these credits help fund vital forest restoration and clean energy projects in countries that need investment most.

Energy News

Devdiscourse

Time

Narrative B

Allowing international offsets undermines the EU's climate leadership and domestic ambition when the bloc could demonstrably achieve deeper cuts at home. This approach risks slowing real emissions reductions within Europe and sets a dangerous precedent for other major emitters to avoid the hard work of decarbonization.