Carbon credits for the EU 2040 targets? Only if they are demonstrably additional, prevent real CO₂ emissions and ensure a major social impact.
*Update November 2025* The European Union has reached an agreement on its new climate targets for 2040. The countries agreed to reduce greenhouse gas emissions by 90% compared to 1990 levels. Member states will be allowed to make greater use of international carbon credits to achieve this reduction: up to 5% of the emission reduction may be invested in projects outside Europe.
FairClimateFund maintains that this development will only have positive effects when high-quality carbon credits are used. See the original post below in response to the previous report.
Investing in carbon credits to achieve climate goals.
The EU wants to allow room for ‘flexibility’ in its 2040 climate target: up to 3% of the CO₂ reduction may be achieved outside Europe through international carbon credits.
Although carbon credits are an important part of FairClimateFund’s approach, we do not necessarily welcome recent developments in this area. FairClimateFund believes that companies, governments and countries must first substantially reduce their own emissions before investing in carbon credits.
If European legislation does allow for the use of carbon credits to achieve climate goals, the emphasis should be on projects that not only contribute to CO₂ reduction, but also to measurable social impact. In this way, the commercial carbon market is used to support precisely those families that are hit hardest by climate change.
Carbon Market Watch rightly warns, following recent developments:
“By choosing to combine different types of removals and emission reductions, the European Commission risks opening a Pandora’s box where low-quality carbon credits, derived from questionable or unproven practices, are used to offset very real emissions.”
This underlines the importance of strict quality criteria and transparency when using carbon credits.
Quality of carbon credits crucial
FairClimateFund’s climate projects meet the highest international quality standards. They are certified according to both the Gold Standard and the Fairtrade Climate Standard. This means that our projects not only reduce greenhouse gas emissions but also provide fair compensation for local households.
More than 70% of the revenue from carbon credits goes to our projects. These projects demonstrably contribute to several Sustainable Development Goals (SDGs), such as reducing poverty, equal opportunities for women, improving health, and access to clean energy. FairClimateFund is also a recognized B Corp and operates transparently and sustainably.
In light of the new EU climate plans, we call on companies and governments to invest only in climate projects that truly make an impact: for the climate and for people worldwide.
