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4w ago

EU Proposes 90% Emissions Cut by 2040 With 3% Offset Credit Mechanism

The proposal enters EU Council and Parliament talks under Denmark’s presidency with member states assigning sectoral reduction responsibilities.

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Overview

  • The European Commission formally unveiled the 2040 target on July 2 as part of its Climate Law review, replacing fixed sector quotas with a flexible framework for member states.
  • Member states may meet up to 3% of their reduction obligations through certified international credits purchased from Paris-aligned developing countries beginning in 2036.
  • Climate Commissioner Wopke Hoekstra said the credits must be verifiable, certified and additional to ensure they bolster global sustainable investment.
  • Analysts warn the external credits option could shift emissions equal to those of Austria and Greece offshore and weaken the EU’s internal decarbonization drive.
  • Final adoption hinges on unanimity in the EU Council and a European Parliament vote, with Denmark targeting a unified Council position by September ahead of COP30 in Brazil.