EU can reduce risk of international credit shortfalls through centralised purchasing and early planning, find CONCITO and CATF
Under the EU’s revised Climate Law, the bloc can meet up to 5% of its 2040 climate target from 2036 with international carbon credits purchased under Article 6 of the Paris Agreement. A new joint analysis from CONCITO and Clean Air Task Force provides recommendations for the European Commission’s forthcoming legal framework, identifying strategies to minimise risks for these purchases.
The report, More Than a Buyer, identifies a significant risk that the EU may over-rely on international credits that fail to materialise at assumed volumes to meet its climate targets. This risk stems from a range of factors: the strict quality and strategic criteria the credits must meet, Article 6 rules that prevent banking credits across compliance periods, long project lead times, and a growing likelihood that partner countries will want to retain more of their own emissions reductions to meet climate goals.
“The EU has made a bet that international credits will be available at scale in 2036, and right now nothing guarantees that,” said Codie Rossi, Senior Policy Manager for Carbon Management at CATF. “International carbon markets have a track record of underdelivering, and nobody has ever bought quality credits at this volume. No framework can eliminate these risks, but smart policy design can reduce them: one central buyer, and a procurement timeline that starts now, not in 2036.”
To reduce the risks associated with utilising international credits, the report recommends:
- Using collective buying power to drive real change: By buying credits centrally — through the European Commission, an existing agency, or a dedicated body — rather than leaving it to individual Member States to purchase separately, the EU can tie credit purchases to genuine investment and climate partnerships that could drive lasting transformation in the countries selling them, rather than a race among Member States for the cheapest available compliance option.
- Planning now for a constrained market: The EU and Member States should begin signalling demand for credits by 2030 at the latest, commit funding for purchases well before 2036, and build in a calibration moment to catch potential shortfalls in supply early, ensuring there is time to intervene or change course.
- Keeping international credits out of the EU ETS: International credits should be funded nationally as a limited, voluntary flexibility under national climate targets and kept out of the EU Emissions Trading System as a compliance route. Doing so preserves the integrity and predictability of the ETS and lets ETS revenues stay focused on Europe’s domestic clean energy transitions.
Press Contacts
Julia Kislitsyna, Communications Manager, Europe, Clean Air Task Force, [email protected], +4915116220453
About CATF
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With 30 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
About CONCITO
CONCITO is a leading climate think tank. We aim to translate relevant knowledge into climate action and thereby accelerate the green transition in Denmark and internationally. Through scientific and knowledge-based analyses and information, the aim is to show how it is possible to create a climate-neutral and climate-resilient society.
