Poland Expects EU to Allow Global Carbon Credits in Climate Law

Emissions rise from smokestacks at the PKN Orlen SA oil refinery in Plock, Poland, on Friday, July 17, 2020. Polish refiner PKN Orlen won conditional European Union approval to buy rival Grupa Lotos SA after agreeing on a "extensive" commitments package designed to allay potential competition concerns. Photographer: Bartek Sadowski/Bloomberg Photo by Bartek Sadowski /Bloomberg

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(Bloomberg) — The European Union will likely recognize international carbon offsets under its new framework for cutting emissions as member states push for more flexibility on climate, according to Poland.

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There’s currently not enough support for the European Commission’s plan to reduce 90% of net emissions by 2040, said Polish deputy energy minister Chris Bolesta, whose country holds the bloc’s rotating presidency. Allowing some foreign carbon credits to count toward the goal, however, could help secure member states’ buy-in as they’re typically cheaper, he argued.

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“It’s about the costs of the goal and there is a large group of member states who think the 90% domestic target is excessive,” he told Bloomberg News in an interview in Warsaw. “We have to use all the tools available. I’m convinced the discussion about international carbon credits is now about how and not anymore if to allow them in the EU.”

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While the bloc used to allow credits generated by projects outside the EU under its Emissions Trading System, it placed strict limits from 2013 amid environmental integrity concerns and banned them in 2021. Since then, a new carbon market mechanism was agreed under the Paris Agreement, with stronger provisions on the quality of credits.

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The credits would need to come from the United Nations-overseen mechanism and meet certain standards yet to be set by the EU, Bolesta said. 

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Europe should consider both the option of allowing them for compliance in the Emissions Trading System and in sectors outside the bloc’s carbon market, he added.

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The commission, the EU’s regulatory branch, is due to unveil the 2040 emissions target next month, providing a reference point on the way to climate neutrality by the middle of the century. But the region’s struggles with high energy prices and toughening international competition have reduced appetite for expensive climate measures.

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Bolesta said it may take about a year from when the plan is unveiled to actually being adopted, given it still requires support from member states and the European Parliament. 

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The commission had hoped the new target could become the basis for Europe’s clean transition plan for 2035 under the United Nations framework, which would need to be submitted before the COP30 climate summit in Brazil this November. Bolesta said the commission should come up with an alternative plan for the EU’s submission.

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A separate proposal by the commission, however, on phasing out Russian fossil fuels by the end of 2027 is seeing support from “a solid qualified majority” of countries, Bolesta said, referring to a plan unveiled last week. 

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