Germany, EU 'likely' to eye Article 6 in coming years

Germany and the EU are likely to consider Article 6 agreements "in the years to come", German economist and government adviser Andreas Loeschel has said.

This is because the EU's target to cut its greenhouse gas (GHG) emissions by 55pc by 2030 compared with 1990 levels is unlikely to remain in place for long, given higher ambitions in the European Parliament and on the part of several member states.

Agreements under Article 6 of the Paris climate agreement will play an important role in the context of additional efforts, meaning deeper and/or faster GHG cuts, Loeschel told Argus. The article contains rules that would allow countries to trade emissions reductions.

The EU and Germany are unlikely to have to resort to Article 6 activities to meet their current emissions reduction targets, said Loeschel, who is the chairman of the expert commission tasked by the German federal ministry of economic affairs and energy with monitoring the country's energy transition.

Making "complementary" use of flexible instruments is the "best way to organise the necessary financial transfer into developing countries", Loeschel said. Focusing on purely domestic targets "does not make economic sense and is counterproductive for global climate protection".

Oliver Geden, head of Europe at Berlin-based think-tank SWP, told Argus that pressure on the EU to allow carbon offsets through Article 6 agreements may rise once there is agreement at UN level on the final Article 6 rules. But it is difficult to predict how such a debate could run, given that the EU "target definition" would need to be weakened, he said.

Parties to the Paris deal will aim to finalise the rulebook for the article at the upcoming UN Cop 26 climate conference, having failed to reach a consensus on the issue at previous summits.

By Chloe Jardine