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The European Commission (EC) has unveiled a new environmental proposal that could significantly reshape the voluntary carbon market landscape. If adopted, the European Union could become the world’s largest buyer of UN-recognised carbon credits, potentially demanding nearly 350 million tonnes of CO₂ equivalent between 2036 and 2040.
Białowieża Forest, on the Poland–Belarus border, Europe’s oldest primeval forest and a UNESCO site, home to bison and rare species. AI generated picture.
This development stems from the EC’s draft amendment to the European Climate Law, released last week, which outlines a 90% emissions reduction target by 2040 compared to 1990 levels. As part of the proposal, the Commission introduced the possibility of using ‘high-quality international credits under Article 6 of the Paris Agreement’ to contribute up to 3% of that target.
While the proposed 3% share is relative to 1990 emissions, the EC has not yet defined how this translates into an absolute volume. A source at the Commission noted, ‘The total quantities will depend on how the credits will relate to the architecture of the 2040 legislative policy package.’
Nevertheless, estimates are already circulating. Based on Finland’s interpretation, if the credit use increases linearly from 0% in 2036 to 3% by 2040, the EU could consume approximately 347.6 million tonnes of carbon credits over the five-year period. That would outpace Japan’s current target of 200 million tCO₂e by 2040.
Consultancy ClearBlue Markets estimates EU demand for Article 6 credits could range from 315 to 378 million tCO₂e during the same period. Others, like the Öko-Institut’s Lambert Schneider, suggest it could reach as high as 1 billion tonnes by 2050.
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Nordic countries have largely welcomed the proposal. ‘The Commission’s proposal is in line with Finland’s priorities… [It] creates stability for companies to invest in clean solutions’, said Finnish Climate Minister Sari Multala. Sweden similarly supported the use of Article 6 as a flexibility mechanism post-2030.
But not all member states are on board. Czech Prime Minister Petr Fiala rejected the targets outright, calling them unrealistic and misaligned with economic priorities. His party announced via social media, ‘We won’t be voting for these unachievable targets.’
This internal division underscores the challenges ahead. The proposal must be approved by both the European Parliament and the Council to become law. The Danish government, which currently holds the rotating EU presidency, will oversee the legislative process.
The Commission’s recognition of Article 6 credits is seen as a potential catalyst for carbon finance, particularly in developing countries. ‘Far from a loophole, this is a practical step to direct climate finance where it’s needed most’, stated project developer South Pole.
The proposal also avoids integrating these credits into the EU Emissions Trading System (ETS), where international units were allowed until 2012. Instead, experts suggest a new EU-wide purchasing facility might emerge to centralise credit procurement and avoid market distortion.
Key procedural steps are still pending, including committee assignments and the appointment of a rapporteur in the Parliament. The first vote is not expected until after the summer recess. In the meantime, further impact assessments will examine how Article 6 credits and carbon dioxide removal (CDR) mechanisms can fit into the broader EU policy mix. Notably, the EU plans to restrict ETS-eligible CDRs to domestic sources, raising concerns about supply shortfalls as the ETS cap approaches zero around 2040.
As Schneider warned, any Article 6 credits used must comply with Paris Agreement rules, particularly the prohibition on banking credits beyond the agreed timeframe: ‘The EU can only use carbon credits that are generated in the same period [2036–2040].’ The outcome of these deliberations will influence not only the EU’s environmental trajectory but also the future scale and structure of global carbon markets.
Read more: Carbon market poised to hit $1 trillion by 2050
As the EU’s environmental ambitions drive demand for only the highest-integrity carbon credits, the future of the market will be defined by quality, traceability, and real-world impact. DGB Group is built for this next chapter. As a publicly listed company on Euronext, we deliver premium, nature-based solutions that meet and exceed the rigorous standards now shaping international carbon policy. Our Verra and Gold Standard-certified projects don’t just generate credits, they restore ecosystems, enrich biodiversity, and create lasting value for communities. With rising demand and tightening criteria, DGB is ready to supply the kind of carbon units the world is moving towards. Learn how your business can secure trusted credits and invest in nature-positive impact, starting today.
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