The EU Commission recently invited feedback from the public on the use of high-quality carbon credits to meet the EU’s greenhouse gas emission reduction target of 90% in 2040 compared to 1990 levels. The EGC contributed with the following opinion paper, written by Godela von Kirchbach and Eva Riemer, Co-chairs .
Feedback from European Grandparents for Climate (EGC) on the EU Commission’s call for evidence on how the use of high-quality international carbon credits may best support the EU’s 2040 climate target.
The EGC welcomes the possibility to provide feed-back on the use of high-quality carbon credits to meet the EU’s greenhouse gas emission reduction target of 90% in 2040 compared to 1990 levels. The 90% target follows the recommendation by European Advisory Board on Climate Change that recommended a 90–95% emissions reduction range for 2040. However, the Advisory Board has also stressed that there “is a need for a strong focus on domestic implementation to keep the EU on a credible pathway towards climate neutrality by 2050.”[1]
The EU agreement on the 2040 climate target allows for the use of so-called high-quality carbon credits equivalent to up to 5% of 1990 EU net emissions outside the EU. This number amounts to 236 Mt of CO2 equivalents[2] corresponding to over one third of Germany’s annual greenhouse gas emissions. It also means that the EU allows emissions to be 50% higher in 2040 than if the 90% target was to be met without the use of international carbon credits. So, it is not a small number.
The EGC is concerned that the use of carbon credits would effectively reduce the net domestic emissions reductions in the EU to 85% by 2040, making it more difficult and potentially more expensive to reach carbon neutrality. We therefore recommend the Commission to minimize as much as possible this flexibility in the political agreement.
Furthermore, the EGC is concerned about how to ensure that the carbon credits entering the EU and being used to meet our 2040 target will be of high enough quality. Carbon credits must be aligned with Article 6 of the Paris Agreement, but it is pertinent that the Commission clearly defines what additional standards must be met, and that the EU Commission monitors and verifies that these high-quality standards are met, not the UN and not the individual member states.
When setting the standards for high-quality carbon credits, it should be ensured that the credits are truly additional, that they are permanent, that no double counting takes place and that the credits can be traced transparently and independently verified and monitored. The EU should only be able to use credits from parties that live up to the requirements of the Paris Agreement and should not be able to use credits that represent the low hanging fruits. All parties have commitments, and if for example a developing country sells cheap reductions to the EU, this country’s own reductions will become more expensive, or it will lower its own national emission reduction targets. Therefore, the credits should have a value that is close to the marginal cost of reducing emissions in the EU, e.g. as reflected by the price on the EU carbon market.
Ensuring that any international credits used are of demonstrably high environmental integrity will be essential to safeguard the credibility of the 2040 target.
[1] https://climate-advisory-board.europa.eu/news/2040-climate-target-a-key-milestone-but-flexibilities-could-jeopardise-2050-climate-neutrality
[2] https://www.eea.europa.eu/en/analysis/publications/trends-and-projections-in-europe-2025/total-net-ghg-emissions