Environmental (Commonwealth Union)_ The EU’s old climate hand has once again made the headlines. This time, however, there’s a touch of scandal involved. Jos Delbeke, the genius behind the EU’s Emissions Trading System (ETS), once banned foreign carbon credits from being utilized after they had nearly collapsed the bloc’s carbon market. Today, the retired Belgian policy veteran thinks it’s time to revisit them reluctantly.
In a media interview, Delbeke was keen on allowing international carbon credits to be incorporated into the EU’s subsequent climate goals. The statement comes ahead of a major announcement on July 2, when EU Climate Commissioner Wopke Hoekstra will announce an emissions reduction target for 2040 that might bring back global offsets into the EU’s climate toolkit.
“I’m in favor of reopening the door for those credits,” said Delbeke. “But we have to be very restrictive on the quality of those credits. And we have to be very alert and make our own decisions on the quantity that we are going to allow.”
Delbeke’s support stands in stark contrast to his past actions. Director-General for Climate Action at the European Commission up to 2018, he spearheaded the phasing out of international offsets entirely under the ETS by 2021. His action was in reaction to the EU’s brief experiment with the Clean Development Mechanism (CDM), an international carbon credit program born of the Kyoto Protocol that nearly imploded.
Although the CDM was promoted as a win-win that enabled European companies to pay for reducing emissions in other locations rather than retrofitting their own factories, it was inherently flawed. A number of credits issued under the scheme were suspect or unverifiable, and the sheer volume overwhelmed the ETS with low-cost alternatives, driving the price of carbon down. That diluted the incentive for dirty companies in Europe to innovate or get clean.
“Most of those credits ended up in Europe and were going to kill the ETS market,” Delbeke stated. “It depressed the prices, and so aside from a market stability reserve, we established a non-CDM credit policy to close the door to all CDM credits.”
But Delbeke believes the world and its regulators have changed now. A new global credit system developed under the Paris Agreement Article 6 was negotiated with EU backing last year and promises improved governance. But he warns Brussels that they must not repeat the same mistake twice. Instead of putting the monitoring in the hands of foreign agencies, the EU needs to develop its own robust standards for granting credit and limit the number that can be used.
There are some ways of bringing the credits in without undermining the ETS,” Delbeke said. “And we shouldn’t limit ourselves to bringing them into the ETS itself. There are other possibilities, like using them in sectors that are not included in the ETS, such as agriculture or segments of transport.
Despite his arguments, opposition is fierce. Environmental NGOs and the European Scientific Advisory Board on Climate Change cautioned that reviving foreign offsets would undercut climate ambition, provide loopholes for emitters, and once again distort the carbon market.
Even the European Parliament’s own in-house think tank jumped in last week, warning that, “if international credits were readmitted, these concerns would remain today.”
Still, Delbeke believes the EU can continue to be pragmatic as it marches toward a more uncertain geopolitical future.
Delbeke argues that economic pressure, energy security, and industrial policy have shifted the agenda, making rigid climate goals harder to achieve without some flexibility. According to him, properly executed international offsets could serve as a valuable safety measure.
“If we are grown-up in the discussion on carbon credits, very restrictive on quality, very restrictive on quantity, they can help us realize the targets we are setting for ourselves,” he said.
The case now shifts to Commissioner Hoekstra’s announcement last July, which may determine if the EU is committed to home decarbonization or ventures into a new epoch where global collaboration and carbon finance are center stage.
