The European Union is exploring a major policy change that could reshape its ESG and carbon neutral strategy — allowing international carbon credits to help meet its 2040 climate target. Traditionally committed to domestic-only emissions reductions, the EU is now considering a dual-track approach: setting a slightly lower domestic emissions reduction goal and permitting member states to offset the remainder using global carbon credits. 

According to insiders, this adjustment would give industries more flexibility while enabling climate finance flows to countries in the Global South, supporting sustainability efforts such as forest restoration in regions like Brazil. 

“We are sensitive to requests for a bit of pragmatism,” said EU Climate Commissioner Wopke Hoekstra, while emphasizing that the 90% reduction remains the “starting point” for formal negotiations ahead of summer 2025. 

The proposed pivot could play a pivotal role in advancing the EU’s broader ESG goals, yet it has stirred controversy. Critics highlight past problems with international credits, including market manipulation, lack of transparency, and a dramatic collapse in carbon pricing. The EU banned international offsets in 2013 after a surge of low-integrity credits weakened the effectiveness of its climate market. 

“The list of scandals linked to international credits is long—fraud, lack of environmental integrity, and the drastic collapse of the EU carbon price,” warned Linda Kalcher, Executive Director of Strategic Perspectives. 

However, with the UN developing stricter global safeguards and verification systems, advocates suggest this could be an opportunity to re-engage the international market responsibly. Andrei Marcu of ERCST noted, “Countries at the other end of the negotiations would welcome this, because they are badly in need of climate finance.” 

The European Commission is expected to release a detailed proposal before summer. Final approval will rest with the European Parliament and member states, shaping the future of Europe’s climate action and ESG leadership. 

Sources : 

https://esgnews.com/eu-considers-using-international-carbon-credits-to-meet-2040-climate-target/ 

https://www.reuters.com/sustainability/cop/eu-considering-international-co2-credits-meet-new-climate-goal-sources-say-2025-04-07/ 

https://ercst.org/ercst-comment-eu-considering-international-co2-credits-to-meet-new-climate-goal-sources-say/ 

https://carboncredits.com/international-carbon-credits-back-on-the-table-eus-climate-goal-gets-a-twist/