Carbon credits to count towards EU’s 2040 emissions reduction goal

The European Commission has formally proposed a binding environmental target for 2040: a 90% net reduction in greenhouse gas emissions compared to 1990 levels. The move is a key milestone in the EU’s broader strategy to achieve carbon neutrality by 2050, and it introduces—for the first time—a role for international carbon credits in meeting long-term emissions goals.

This updated target builds on the EU’s existing 2030 objective to cut emissions by 55% and comes in response to extensive scientific analysis and public engagement. In recent consultations, citizen support for environmental action remained high, with the Commission citing the latest Eurobarometer results as evidence of a ‘solid mandate’ for continued decarbonisation efforts.

‘As European citizens increasingly feel the impact of climate change, they expect Europe to act. Industry and investors look to us to set a predictable direction of travel’, said Commission President Ursula von der Leyen. ‘Today we show that we stand firmly by our commitment to decarbonise Europe’s economy by 2050. The goal is clear, the journey is pragmatic and realistic.’

One of the most significant changes in the proposed amendment to the EU Climate Law is the introduction of greater flexibility for Member States. From 2036 onward, countries would be permitted to count international carbon credits—up to 3% of the 90% target—towards their emissions reductions. These credits must be high-quality and sourced from non-EU countries.

Read more: DGB’s cookstove projects: How they truly make a difference

Vice President Teresa Ribera underscored the importance of balance in the EU’s green agenda: ‘We are not choosing between the economy and the green agenda, we are choosing both. Europe reaffirms its commitment to a fair, ambitious, and competitive green transition.’

The proposal is also part of a wider industrial strategy to maintain Europe’s competitiveness. It complements initiatives such as the Clean Industrial Deal, tax incentives for clean tech investments, and simplified state aid rules. These measures aim to bolster Europe’s green manufacturing base amid rising competition from the US and China.

The proposed environmental law amendment will now go before the European Parliament and the Council for negotiation and adoption under the ordinary legislative procedure. Once approved, the 2040 target will serve as a guidepost for the EU’s post-2030 sustainability and energy framework, as well as its updated Nationally Determined Contribution ahead of COP30 in Brazil later this year.

Read more: EU carbon prices gain ground in May as traders eye UK integration

With up to 148 million tonnes of CO₂ soon eligible to be offset annually through international carbon credits, the stage is set for a major expansion of the market. At DGB Group, we’re ready. Our large-scale, nature-based projects are not only built for scale—they’re built for trust, delivering verifiable, high-integrity credits that restore ecosystems and uplift communities. As global demand rises, the value of truly high-quality credits has never been clearer. 

Looking to purchase carbon credits? Get in touch.