Using International Carbon Credits to Achieve National Mitigation Targets of EU Member States – Options for Accounting under Article 6 of the Paris Agreement
Report prepared for the Swedish Energy Agency
The European Union (EU) has communicated in its nationally determined contribution (NDC) a target of reducing greenhouse gas (GHG) emissions by 55% until 2030 compared to 1990 levels. Next to this EU-wide target, several EU member states have also established national mitigation targets. Some of these member states may wish to purchase internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement to achieve these targets. This paper explores how the purchase of ITMOs by EU member states can be accounted for under Article 6 of the Paris Agreement, in particular the method and timing for applying any corresponding adjustments. Towards this end, the paper analyses the decisions from COP26 in Glasgow and COP27 in Sharm El-Sheik in the specific context of the EU and its member states. The paper also briefly highlights implications for the establishment of an EU ITMO registry and potential implications of Article 6 decisions on the accounting for single-year national mitigation targets.