Explainer-Do international carbon credits fight climate change?
BRUSSELS (Reuters) -The European Commission has proposed an EU climate target for 2040 that allows countries to count carbon credits bought from developing nations towards the EU goal for the first time.
Here's what that means, and why the EU move on Wednesday faced criticism from campaigners and some scientists.
WHAT ARE CARBON CREDITS?
Carbon credits, or offsets, involve funding projects that reduce CO2 emissions abroad in place of cuts to your own greenhouse gas emissions.
Examples include forest restoration in Brazil, or converting a city's petrol buses to electric. The buyer counts "credits" for those emission reductions towards its climate goal, and the seller gets finance for their green project.
Proponents say the system generates much-needed funding for CO2-cutting efforts in developing nations and lets countries work together to cut emissions around the world.
However, the reputation of CO2 credits has been dented by a string of scandals in which credit-generating projects failed to deliver the climate benefits they claimed.
WHY IS THE EU BUYING THEM?
The European Commission proposed allowing up to 3 percentage points of the EU's 2040 target - to cut net emissions by 90% from 1990 levels - to be covered by carbon credits bought from other countries.
The EU's existing climate targets require countries to meet the goals entirely by cutting emissions at home.
The bloc's executive Commission said last year it hoped the EU could agree a 90% emissions-cutting target for 2040, with no mention of carbon credits.
Tumultuous geopolitics and the economic woes of European industries have since stoked political pushback, with governments from Germany to Poland demanding a softer target.
In response, the Commission said it would add flexibilities, and landed on carbon credits as a way to retain a 90% emissions-cutting goal while reducing the domestic steps needed to reach it.
EU countries and the European Parliament must negotiate and approve the goal.
WHAT ARE THE RISKS?
The EU plan was welcomed by countries including Germany, which had pushed to include carbon credits in the goal, and by carbon credit project developers as a boost for climate finance.
But environmental campaigners said the EU was shirking domestic CO2-cutting efforts and warned against relying on cheap, low-value credits.
The EU's climate science advisers had also opposed buying credits under the 2040 target, which they said would divert money from investments in local clean industries.
The EU banned international credits from its own carbon market after a flood of cheap credits with weak environmental benefits contributed to a carbon price crash.
To try to address the risks, the Commission said it would buy credits in line with a global market and rules for trading carbon credits which the U.N. is developing. These include quality standards aimed at avoiding the problems that unregulated credit trading has faced in recent years.
Brussels will also propose rules next year on specific quality standards for the carbon credits the EU buys.
HOW MUCH WILL IT COST?
The EU doesn't yet know. Carbon credit prices today can be as low as a few dollars per tonne of CO2, up to more than $100, depending on the project.
EU emissions records suggest the bloc would need to buy at least 140 million tonnes of CO2 emissions to cover 3% of the 2040 target, roughly equivalent to the Netherlands' total emissions last year.
One senior Commission official said the bloc was determined not to hoover up cheap junk credits.
"I don't think that would have any additional value. The credits we see currently on voluntary carbon markets are very, very cheap, and that probably reflects a lack of high environmental integrity," the senior official said.
(Reporting by Kate Abnett; additional reporting by Virginia Furness; editing by Philippa Fletcher)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysia Sun
an hour ago
- Malaysia Sun
Made Here: Caoxian County, China's largest Hanfu production hub
Xinhua 05 Jul 2025, 07:54 GMT+10 CAOXIAN, July 5 (Xinhua) -- Leveraging its robust e-commerce foundation, Caoxian County in east China's Shandong Province has emerged as a significant global hub for Hanfu, the traditional attire of China. The county has built a comprehensive industrial chain encompassing design, manufacturing, copyright protection, and digital marketing, transforming tradition into a thriving modern industry. The Hanfu produced in Caoxian, especially the iconic horse-face skirt (Mamianqun), has gained international acclaim. Selected pieces have been featured at events like Milan Fashion Week, bringing these garments to the global stage. Now exported to markets including Australia, Canada, and European countries, Caoxian's Hanfu industry achieved remarkable sales of 12 billion yuan (about 1.7 billion U.S. dollars) in 2024. Driven by a youth-led cultural revival, Caoxian's Hanfu boom exemplifies the successful fusion of ancient heritage with digital innovation. It not only transforms the ancient aesthetics into symbols of modern Chinese identity on the global stage but also serves as a new engine for increasing the income of local people and promoting rural revitalization.
The Sun
4 hours ago
- The Sun
China and France pledge multilateralism to stabilise global uncertainty
PARIS: French President Emmanuel Macron and Chinese Foreign Minister Wang Yi met at the Elysee Palace to discuss strengthening multilateralism and addressing global challenges. Macron emphasised the shared responsibility of France and China as permanent UN Security Council members in fostering stability amid growing unpredictability. Macron expressed France's commitment to deepening ties with China, particularly in economic and trade relations, while welcoming more Chinese investment. He also highlighted the importance of the EU-China relationship as both sides mark 50 years of diplomatic relations. Wang Yi conveyed President Xi Jinping's regards and reiterated China's dedication to high-quality development and an open economic system. He stressed the need for France and China to resist unilateralism and bloc confrontations, ensuring a more predictable global order. Both leaders agreed on the necessity of reinforcing the UN's role in global governance, especially as the organisation approaches its 80th anniversary. They also discussed key international issues, including the Ukraine crisis, Gaza conflict, and Iranian nuclear negotiations. Wang noted that China and the EU had resolved the brandy dispute through dialogue, urging France to encourage fair treatment of Chinese businesses in Europe. - Bernama-Xinhua
The Star
5 hours ago
- The Star
Malaysia, France reiterate calls for permanent ceasefire in Gaza
Prime Minister Datuk Seri Anwar Ibrahim (front, left) attends a joint press conference with French President Emmanuel Macron at the Elysee Palace today. --fotoBERNAMA (2025) COPYRIGHT RESERVED PARIS: Malaysia and France have both reiterated calls for a ceasefire in Gaza as the Asian leader paid an official visit on his European counterpart here. President Emmanuel Macron, speaking near the steps at the entrance of Palais de l'Elysee, said the two nations were now calling 'more than ever' for an agreement on a permanent ceasefire, the release of hostages, and unimpeded access for humanitarian aid, which is so desperately needed in Gaza. 'I commend the efforts of the mediators and call for the swift conclusion of the agreement currently on the table. 'A lasting solution cannot be achieved without reopening a clear political perspective based on the two-state solution — where two states live side by side in peace and security — allowing for the creation of a Palestinian state and full regional integration of Israel,' Macron, who hosted Anwar, said in French. He said in the immediate term, faced with an unbearable humanitarian situation, it is Israel's responsibility to allow the civilian population access to humanitarian aid. The president also said this concern for international law saw the absence of a legal basis for the retaliatory strikes on Iran and to call for a negotiated solution. Iran must unequivocally reaffirm its support for the Non-Proliferation Treaty and agree to a deal that would lead to the end of uranium enrichment in Iran — while allowing the country to benefit from the peaceful uses of nuclear energy, he added. Anwar, who stood next to Macron, lauded the latter for trying to resolve the outstanding conflict in Gaza. 'Of course, we have condemned the continued bombings and atrocities inflicted upon civilians, women and children, and it's a shame that international community is not able to resolve this. So your initiative was supported by us,' he said. Anwar also noted that he could not deny the issue of use of nuclear energy for peaceful means. 'Nuclear Non Proliferation, proliferation, or even power, cannot be seen to be selective,' he said. Malaysia too had also committed to the two state solution, he said, adding: 'We must impress upon Iran to use this for peaceful methods and peaceful means and allow for inspection which they have given commitment. But I think we have to follow through. And I think therefore, please be assured, President Macron that we will be here.' Later, the two leaders had an official working dinner followed by Anwar having a tete-a-tete with Macron, before flying off to Rio de Janeiro for the third and final leg of his visit to three cities.
