In February, the European Commission launched a consultation to seek views on the use of international carbon credits to help meet the EU climate target for 2040.
The consultation matters because it gives carbon market participants and other stakeholders a chance to give their input on how carbon credits can be used from 2036 to help meet the bloc’s emissions reduction target for 2040.
Ultimately this will help determine what kind of carbon projects will be eligible for use toward the EU’s climate goals, with implications for investors, project developers and governments.
In July 2025, the EC proposed an amendment to the European Climate Law establishing a legally binding target to reduce the EU’s net greenhouse gas emissions by 90% by 2040 compared with 1990 levels.
As it stands, the European Climate Law includes the possibility to use high-quality international credits to make a contribution of up to 5% of the EU’s 1990 net emissions. This effectively means the domestic EU target is an 85% reduction from 1990 levels by 2040.
“Respondents are asked for their input on what they see as the best approach for the use of credits and how this can be designed in a way that is both ambitious and cost efficient, and in line with the goals and rules of the Paris Agreement,” the EC’s Directorate General for Climate Action said in a statement on 9th February.
The use of international credits is seen as a way to increase flexibility for EU member states in meeting their 2040 climate targets, allowing emissions reductions from climate projects outside the EU to be used alongside domestic reductions.
The climate law also provides for the possibility of a pilot period between 2031 and 2035 to help initiate a high-quality international carbon credit market.
Points of debate include the quality standards for carbon reductions and removals that will determine eligibility of credits for use in the EU as well as whether carbon credits should be allowed as compliance instruments under the EU Emissions Trading System.
The EC’s consultation on the use of international credits runs from 9th February to 4th May, 2026.
The consultation will ultimately inform the legislation that will govern the use of international carbon credits from 2036. Now is your chance to help shape that legislation!
You can find out more information on this call for evidence here: Legal framework for the possible use of international carbon credits towards the 2040 EU climate law target
To find out more about carbon credits, visit: Who Buys Carbon Credits & Why? – Carbonwise
To see an example of how carbon credits and carbon insetting can be used as part of a wider climate strategy to address a company’s scope 1, 2 and 3 emissions, see our Visual Learning asset: Carbon Reductions, Insetting & Offsetting – Carbonwise
And stay tuned to Carbonwise for more insight as the markets for carbon credits continue to evolve!
