EU struggles with growing internal pushback over climate policy

EU mulls international carbon credits amid net-zero pressure. (Photo: iStock)

Pressure is mounting within the European Union to ease climate regulations, with influential lawmakers calling for a lower 2040 emissions target. They warn that overly stringent rules could overwhelm the manufacturing sector and even trigger deindustrialization.

Meanwhile, the European Commission is also exploring the possibility of using carbon credits from international emissions reduction programs to help meet its climate goals.

Climate targets under political scrutiny as EPP urges adjustment

The European Commission had planned to propose amendments to the EU Climate Law by the end of March, including setting the 2040 emissions reduction target as a stepping stone toward carbon neutrality by 2050. However, the proposal has yet to be released, with a key sticking point being that some member states and lawmakers view the 90% reduction target as overly aggressive.

Peter Liese, a senior member of the European People's Party (EPP), the largest party in the European Parliament and its lead negotiator on climate policy, stated that many representatives from both the European Council and Parliament believe the target is too extreme. “When the 90% is implemented without any flexibility, then it will lead to deindustrialization,” he warned.

The EU measures emissions reductions relative to 1990 levels. The proposed 2040 target of a 90% cut is backed by the Party of European Socialists (PES) and the Greens (EGP). An independent scientific advisory board has recommended a target between 90% and 95%. While the EPP has not formally proposed an alternative figure, Liese noted that even an 85% reduction would be challenging to achieve.

The 2040 emissions reduction target of the EU Climate Law has yet to be finalized. (Image: Unsplash)

EU reconsiders international carbon credits while experts warn of greenwashing

In addition to potential changes to its emissions target, the European Commission is also considering whether to allow the use of international carbon credits under Article 6 of the Paris Agreement. This would enable the EU to fund emissions reduction projects abroad and count those reductions toward its own net-zero goals.

This would mark a major shift in EU climate strategy, as its 2030 and 2050 targets are currently based solely on domestic reductions. The EU banned the use of international carbon credits in its emissions trading system back in 2013, after a flood of cheap credits caused carbon prices to collapse.

However, recent years have seen a wave of greenwashing scandals linked to carbon offsets, including projects that failed to deliver promised reductions or were double-counted.

Linda Kalcher, Executive Director of the Berlin-based think tank Strategic Perspectives, cautioned that international carbon credit markets are fraught with issues such as fraud, lack of environmental integrity, and destabilizing effects on EU carbon prices. She emphasized the need for caution to mitigate these risks.

Source: Reuters(1), (2), (3), Politico