European Union leaders have agreed that international carbon credits should play a role in the bloc’s upcoming 2040 environmental target, marking a pivotal moment for future demand in the carbon market. However, the final target level remains undecided.
Close-up of newly planted trees as part of a reforestation project, with EU flags in the background. AI generated picture.
At a summit in Brussels on 23 October, the European Council discussed the EU’s collective emissions reduction goal for 2040 but stopped short of setting a specific figure. According to the Council’s conclusions, the discussion focused on ‘how to support the achievement of the EU’s intermediate climate target for 2040.’
Among the three elements outlined for the new target, one stands out: the inclusion of Article 6 carbon offsets. Leaders stressed that ‘the importance of contributing to the global emission reduction effort (must be taken into account) in a way that is both ambitious and cost-efficient, notably by defining an adequate level of high-quality international credits.’
While the lack of a fixed number leaves carbon market participants awaiting clarity, the endorsement of carbon credits represents a major policy shift. It signals that the EU intends to leverage UN-backed offsets as part of its long-term strategy to achieve deeper emissions cuts.
Environment ministers are now expected to finalise the 2040 target during their meeting on 4 November. ‘This has been a significant achievement but the final sprint to agree the 2040 target has only just started. Countries still disagree on the contribution of natural carbon sinks and international credits to the 90% reduction pathway’, said Linda Kalcher, Executive Director of a Brussels-based think tank. ‘It’s now on the Danish presidency to craft a deal that gets a majority of countries over the finish line on 4 November’, she added.
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The Council also endorsed a review mechanism that would allow the 2040 target to be adjusted later. The revision clause, leaders said, must consider ‘the latest scientific evidence, technological advances, and evolving challenges to and opportunities for the EU’s global competitiveness.’
Another point of focus was carbon removals. The conclusions called for recognising ‘the realistic contribution of carbon removals to the overall emission reduction effort’, while ensuring that shortfalls ‘would not be at the expense of other economic sectors’.
Leaders also welcomed a letter from European Commission President Ursula von der Leyen outlining plans to ensure competitiveness during the green transition. They called on the Commission to ‘further develop the necessary enabling conditions’ to support citizens and industries as they work toward the 2040 goal.
The Council further noted the Commission’s intent to revise the framework for the Emissions Trading System 2 (ETS2)—set to cover road transport and building heating from 2027—to make its entry into force ‘fair, pragmatic, and socially balanced.’
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As the EU moves toward defining its 2040 climate target, the inclusion of Article 6 credits underscores a global shift toward verifiable, high-quality carbon solutions. The path ahead demands credible action that balances innovation with natural restoration. At Green Earth, we turn this vision into tangible impact through large-scale reforestation and ecosystem projects that restore biodiversity, empower communities, and generate trusted carbon removals. For businesses ready to align with the next generation of environmental policy and deliver results that endure, now is the time to take the next step.
