Reading Time: 3min
The European Union environmental ministers have achieved a major political milestone by agreeing to pursue a 90% net emissions reduction target by 2040.
This decision, reached after intense overnight negotiations in the EU Council, allows member states to use international carbon credits for up to 5% of the target cut, a significant increase from the original proposal.
These changes now head to the European Parliament for final approval.
The EU's decision is its most explicit official endorsement to date, bringing carbon trading and removals into the mainstream strategy for achieving long-term climate goals.
By integrating these credits into its formal targets, the bloc is directly linking its ambition to the global carbon market emerging under Article 6 of the Paris Agreement, which proponents argue will mobilize crucial climate finance for developing nations, supporting projects like adaptation and forest protection abroad.
The shift to Article 6 signals a new era: after integrity issues plagued previous mechanisms, the EU's endorsement of this robust framework helps re-establish trust and quality in the global market.
This decision is a pivotal moment, confirming the market's role as a credible, complementary tool to support domestic decarbonization efforts starting from 2036 (with a pilot phase considered from 2031).
While countries like France and Italy pushed for the 5% allowance for flexibility, Germany’s climate minister, Carsten Schneider, stated that 3% was the maximum Germany could accept. Despite this, the compromise was reached by a qualified majority, with only four countries opposing.
To secure the compromise, ministers also requested a one-year postponement of the implementation of the Emissions Trading System for road transport and buildings (ETS2), pushing its planned launch from 2027 to 2028.
This delay, following lobbying by countries worried about economic impact, is a trade-off for agreeing on the long-term 2040 target.
The EU’s decision creates immediate, confirmed demand for high-integrity carbon removal certificates under the stringent Article 6 rules.
Depending on the final scope and implementation, this 5% credit allowance could represent a cumulative demand of up to 800 million tonnes of CO2e over the compliance period.
Proponents say it will help mobilize finance to developing nations, funding climate adaptation and forest protection projects abroad.
This is no longer an optional market; it is now a foundational component of the EU’s long-term climate compliance strategy.
To meet the EU's future demand for hundreds of millions of tons of offsets, massive capital and technological expertise must be deployed now to create verifiable Article 6-compliant supply.
We are talking about hundreds of projects on the grounds, developped by real people, entrepreneurs and communities, creating local impact often beyond carbon, encompassing reduction of emissions as well as removals using nature-based solutions (reforestation, afforestation..), energy efficiency (fuel switch, EVs..) or industrial mitigations (fugitive gas reductions, methane avoidance..). The projects need to be initiated, financed, certified, deployed, monitored and verified.
This is precisely where Planet2050 can play a decisive role.
By facilitating the development and financing of certified, next-generation carbon removal projects, Planet2050 is positioned to turn the EU's policy commitment into tangible climate action, connecting European regulatory demand with global project supply.
_____
Official Press Relese
Read our EU Policy Series and stay ahead on how the EU is integrating carbon removals into compliance markets!
