According to an internal document provided to Reuters, The European Commission is preparing a proposal, which allows to count international carbon credits to a new, legally binding EU climate target for 2040The proposal has to be officially introduced July 2, 2025

What are carbon credits?

It is about emission allowances, which provide the opportunity to finance CO₂ reduction projects in other countries – for example forest restoration in BrazilCredits are issued according to of the United Nations unified system, which verifies the amount of CO₂ reduced.

⚖️ Flexibility – up to 3 % goals can be covered with credits

The proposal allows for up to 3 % of the total 90 percent emission reduction by 2040 can be fulfilled through these "high-quality international credits"The credits will only be used in the years 2036–2040, while distant legal measures are to define their quality and origin.

💶 Why consider credits?

Some countries – including Italy, Poland and the Czech Republic – they warn of high costs of domestic decarbonizationCredits are to be provided political space and financially ease the transition to achieving the goal.

A real reduction in CO₂ in the EU would mean huge investments in energy, industry and infrastructure. Credits thus represent a flexible alternative, while helping to finance green projects in developing countries.

🛑 Benefits vs. potential risks

Advantages:

• They support projects in countries of the global south (e.g. reforestation, wind energy).
• They give to countries time and space for transformation.
• They help finance decarbonization where CO₂ savings have a greater impact.

Risks:

• There could be a weakening internal pressure for decarbonisation in the EU – the project seems to "buy out" domestic pollution, instead of investing in batteries, wind or heat pumps.
• The problem is also weak or fraudulent programs, where credits do not lead to the expected CO₂ reduction.

⚡ Perfection is needed: Brazil and scientific councils warn

Ana Toni, President of COP30 (destined for Brazil), warns against over-reliance on creditCalls for limiting their quantity and emphasis on their real environmental quality.

Furthermore, the EU scientific advisory body ESABCC warns that over-reliance on credits can divert funding for green development within the EU itself. Stresses the need adhering to the ambition to reduce our own emissions.

🔧 More flexible tools

In addition to international carbon credits, the document also mentions:

• CO₂ removal fees (so-called removal credits) allowed within the European market.
• Ability to distribute the load between sectorsso that countries can choose which sectors to robustly limit emissions (e.g. transport, industry) .

🧭 Next process – approval and discussion

The proposal from July 2 must be discussed in The European Parliament and the Council of the EU, where member states can intervene – in practice it is expected tough dialogue, especially among supporters of flexible solutions and advocates of domestic emission reductions.

🔍 Summary

• The EU is preparing a proposal that will allow international carbon credits to be counted to the 2040 emissions reduction target – up to 3 % from the goal .
• Credits are to be used from year 2036, with a strong emphasis on their quality and origin.
• The European Scientific Council and Brazil warn against over-reliance on credits, which may weaken the EU's own decarbonisation efforts.
• The proposal also supports other options flexible achievement of goals, such as the integration of removal credits and sectoral flexibility.

As a result, the EU is trying to find a balance between ambitious climate goals a economic and political reality member states. In any case, the final text will be shaped as a priority in in Brussels and in the parliaments of the Member States. Spring