EU Proposes Use of Article 6 Credits Towards 2040 Climate Target

The EU’s anticipated move to incorporate Article 6 carbon credits into its 2040 climate target marks a significant and welcome shift in sentiment. While this development was not widely expected, it sends a strong signal that carbon markets are increasingly being recognised as a vital tool in the global climate response under the Paris Agreement.

With credits expected to be phased in from 2036, this is a long-term signal but a powerful one. It reflects growing momentum from governments across the globe in support of carbon markets. The European announcement follows the recent launch of the Coalition to Grow Carbon Markets as initiated by Kenya, Singapore and the United Kingdom, and the French Governments’ Carbon Credits Charter

This backing underscores the critical role of cooperation under Article 6 in achieving the next round of Nationally Determined Contributions (NDCs). Supporting buyer nations in achieving their goals cost effectively and driving carbon finance to sectors that meet the climate and development goals of host nations.

Importantly, this is not about countries avoiding domestic emissions reductions. On the contrary, national action must remain the priority. But this move acknowledges a crucial reality that we will not meet global climate goals without leveraging the full potential of carbon markets. Article 6 can unlock much-needed finance for high-integrity projects around the world, projects that not only reduce emissions but also deliver on sustainable development goals.

This is a positive step forward. It’s about enabling countries and companies to go further, faster; leaning in to climate action, not opting out. As we look to the next decade, we must also ensure that this momentum translates into immediate action and a clear demand signal for high-quality, compliance-grade credits today.

Tim Cowman, Director of Article 6 Solutions at Climate Impact Partners commented:

"This is another important moment for carbon markets. The EU’s move signals a clear shift that carbon markets are no longer a side conversation they’re a critical solution to deliver climate action and channel essential climate finance. This isn’t about avoiding domestic action; it’s about unlocking global finance to go further, faster. But 2036 is over a decade away. In the interim, we need to see continued concrete engagement from a growing pool of Governments, building on the momentum from the launch of the Coalition to Grow Carbon Markets last week."