The European Union (EU) is considering a new policy that could allow the use of international carbon credits to help meet its ambitious 2040 climate target. If implemented carefully, the plan could unlock significant climate finance for projects in developing countries, particularly initiatives that expand access to clean cooking technologies.
At a recent clean cooking summit hosted by the International Energy Agency (IEA), France’s climate ambassador Benoît Faraco suggested that the EU could become a major investor in carbon credit projects. These investments could help accelerate efforts to replace polluting wood and biomass stoves with cleaner alternatives across Africa and other regions.
However, the proposal has also revived a long-standing debate in climate policy. Supporters argue that carbon credits can finance climate solutions globally, while critics warn that poorly designed projects can exaggerate emissions reductions and undermine climate integrity.
As global demand for carbon credits grows, the EU’s upcoming rules could shape the future of the voluntary carbon market.
EU’s 2040 Climate Target and the Role of Carbon Credits
The European Union plans to cut greenhouse gas emissions by 90% from 1990 levels by 2040, making it one of the most ambitious climate targets globally. To support this goal, policymakers are exploring allowing a limited share of emissions reductions to come from high-quality international carbon credits.
Under the emerging framework, these credits could account for up to about 5% of the emissions reductions needed to meet the 2040 goal. The mechanism would likely begin in 2036 and would include strict safeguards designed to ensure environmental integrity.
EU officials believe this approach could ease pressure on domestic industries while still maintaining the bloc’s overall climate ambition. At the same time, it could channel new climate finance into developing countries where emissions reductions can often be achieved at lower costs.
However, the European Commission has not yet finalized the rules governing which projects would qualify or how these credits would be sourced and verified.
Clean Cooking Projects Could Benefit
One area that could receive significant investment is clean cooking technology. During the IEA summit, Benoît Faraco suggested that EU participation in carbon markets could help scale up efforts to replace traditional cooking methods with cleaner alternatives such as liquefied petroleum gas (LPG).
Across many developing countries, households still rely heavily on wood, charcoal, or biomass for cooking. These fuels create severe indoor air pollution and contribute to deforestation and greenhouse gas emissions.
Globally, the challenge remains enormous:
- More than two billion people still lack access to clean cooking
- Indoor air pollution linked to traditional cooking contributes to millions of deaths every year
Most of those without access live in rural areas where energy infrastructure remains limited.
Expanding access to modern cooking technologies requires large investments in equipment, fuel distribution systems, and consumer financing. Carbon credit funding could help close these financial gaps.
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Rwanda Cookstove Initiative Shows the Model
Private companies are already experimenting with this approach. TotalEnergies, for example, has invested in LPG infrastructure aimed at expanding clean cooking access across Africa and India.
One notable initiative involves a cookstove project in Rwanda developed with the organization DelAgua. The program aims to distribute 200,000 high-performance cookstoves to rural households.
Within a year, the project is expected to benefit more than 800,000 people living in rural communities. Compared with traditional open fires, the improved cookstoves significantly reduce pollution and fuel consumption.
The new stoves cut harmful smoke emissions by about 81% and reduce wood use by roughly 71%. Over ten years, the initiative could prevent more than 2.5 million tonnes of carbon dioxide equivalent emissions.
These avoided emissions generate carbon credits that companies can purchase as part of their climate strategies. The program also supports Rwanda’s national goal of providing universal access to clean cooking by 2030.
Global Carbon Markets Are Expanding
Recent developments in international climate policy suggest that clean cooking projects may play a growing role in carbon markets.
In February 2026, a United Nations body approved the first carbon credits to be issued under the global carbon market established by the Paris Agreement. The approved activity focuses on distributing efficient cookstoves in Myanmar.
The project aims to reduce household air pollution and limit pressure on forests by lowering fuelwood consumption. Some of the credits will be used within South Korea’s emissions trading system, while the remaining credits will support Myanmar’s own climate commitments.
UN climate officials highlighted the broader benefits of clean cooking initiatives. These projects not only cut emissions but also improve health, protect forests, and reduce the burden on women and girls who often spend hours collecting firewood.
Meanwhile, data from the voluntary carbon market shows growing activity. A report from SCB Group found that carbon credit issuances increased by 28% quarter-on-quarter in the second quarter of 2025.
During that period, about 68 million credits were issued globally. Cookstove projects accounted for the largest share of these credits, representing roughly 29% of total issuances. Wind projects followed with about 20%, while forest conservation initiatives made up around 13%.
Most cookstove credits were certified under the Verra and Gold Standard programs.
Concerns About Credit Integrity
Despite their potential benefits, cookstove carbon credits have long been controversial. Some climate experts argue that many projects exaggerate their emissions reductions.
Monitoring real-world stove usage can be difficult. Households may receive improved stoves but continue using traditional cooking methods alongside them. In such cases, the actual emissions reductions may be smaller than estimated.
Environmental organizations have also raised concerns about weak monitoring systems and inconsistent verification standards across carbon markets.
An expert from the Brussels-based NGO Carbon Market Watch warned that relying on credits that have repeatedly failed to meet expectations could pose significant risks for climate policy.
These concerns reflect lessons from earlier offset systems, including the Clean Development Mechanism under the Kyoto Protocol. Several projects approved under that framework later faced criticism for overstating emissions reductions.
Because of this history, regulators are now under pressure to ensure that any new carbon credit systems deliver real and measurable climate benefits.
Strong Standards Will Be Critical
EU policymakers say the success of their carbon credit strategy will depend on strict oversight and transparency.
Future rules are expected to focus on three key principles:
- strong monitoring and independent verification
- clear safeguards to prevent double-counting of emissions reductions
- proof that projects deliver additional climate benefits beyond the host countries’ own targets
If implemented effectively, these standards could strengthen confidence in international carbon markets.
At the same time, critics argue that carbon credits should only play a limited role in meeting climate targets. They warn that over-reliance on external offsets could delay necessary emissions reductions within Europe itself.
A Major Global Challenge Remains
The clean cooking challenge illustrates why new financing mechanisms are urgently needed. IEA estimates that around 300 million people must gain access to clean cooking solutions every year to achieve universal access by 2030.
Sub-Saharan Africa accounts for roughly half of the population still relying on traditional cooking fuels. Many rural communities lack access to modern energy infrastructure and affordable alternatives.
Replicating the progress achieved in countries such as China, India, and Indonesia will require large investments and coordinated policy efforts. Carbon finance could become an important tool to accelerate this transition.
Overall, the European Union’s potential use of international carbon credits could reshape the global carbon market and unlock new funding for climate solutions in developing countries.
Clean cooking projects represent one of the most visible opportunities. They deliver clear health and environmental benefits while reducing greenhouse gas emissions.
However, the debate over carbon credits highlights a deeper challenge. Policymakers must ensure that these credits represent real, measurable emissions reductions rather than accounting shortcuts.
If the EU succeeds in designing a robust framework with strict quality standards, international carbon markets could channel billions of dollars into projects that improve lives and reduce emissions worldwide.