Carbon credits are meant to work like this: One country — say, an EU member — pays for a project that reduces emissions in another country (usually a poorer nation), for example, a solar farm that replaces polluting coal-fired power. But instead of the country hosting the solar farm counting the reduction toward its own target, the EU country would get the credit.
In practice, such transactions have often failed to produce documented emissions cuts, but a new United Nations-backed framework finalized last year has raised hopes that future credits will be better regulated.
The Commission was due to present its 2040 target — a legal requirement under the bloc’s climate legislation — by the end of March, having recommended a 90 percent cut in 2024.
The EU executive chose to delay publication and explore options to weaken the target through flexibilities, including carbon credits, after finding insufficient support for the target among EU governments and the European Parliament.
Germany, France and Poland have expressed support for including carbon credits, while critics warn that their use would undermine the bloc’s efforts to decarbonize its economy by midcentury.
