EU to allow international carbon credits in 2040 emissions reduction plan

[Businessman analyze sustainability investment with icons and Green chart. Concept of ESG]
jittawit.21/iStock via Getty Images

The European Commission is set to unveil a 2040 EU climate target on Wednesday that, for the first time, would permit member states to use carbon credits from developing countries to meet a limited portion of their emissions reduction goals, according to a draft of the proposal.

The official target is expected to call for a 90% cut in net greenhouse gas emissions by 2040 compared to 1990 levels.

The draft EU proposal, however, includes flexibility that will soften the 90% emission target for European industry, following pressure from France, Germany, and other governments, including Italy, Poland, and the Czech Republic.

The report said that countries would be given more flexibility in choosing the sectors of their economy that contribute most to the 2040 target.

Once the Commission unveils its plan, EU countries and the European Parliament will enter negotiations to finalize the legislation, with the potential to modify or challenge key elements.

MORE ON KRANESHARES EUROPEAN CARBON ALLOWANCE STRATEGY ETF

* Dividend scorecard for KraneShares European Carbon Allowance Strategy ETF [https://seekingalpha.com/symbol/KEUA/dividends/scorecard]