Across the world, agricultural land is under growing pressure. Soil degradation, biodiversity loss, and increasingly erratic rainfall are undermining the productivity of farming systems that billions of people depend on. This is no longer a concern limited to the environmental sector. Nature degradation now presents a systemic risk to economies, supply chains, and financial systems, affecting all businesses, regardless of sector.

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.

SEE MORE: EU Mobilizes €15.5 Billion to Boost Africa’s Clean Energy Boom

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.

• READ MORE: The Carbon Credit Market in 2025 is A Turning Point: What Comes Next for 2026 and Beyond?

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The carbon removal industry is expanding fast, with new projects moving from the pilot stage to the commercial scale. Companies are racing to build infrastructure that can permanently remove carbon dioxide from the atmosphere. One of them is a Canadian carbon management company, Svante Technologies, which announced that it acquired Carbon Alpha Corporation. This move brings together carbon capture technology with carbon dioxide removal (CDR) project development.

The acquisition strengthens Svante’s role in the carbon capture and storage (CCS) value chain. It also adds Carbon Alpha’s development portfolio to Svante’s operations.

Claude Letourneau, President & CEO of Svante, remarked: 

“This project is a game-changer for Svante and a pivotal moment for scaling verifiable, durable engineered carbon removal solutions working in tandem with nature. By integrating Carbon Alpha’s team, we’re accelerating the delivery of high‑integrity CDR credits at commercial scale in partnership with the MLTC leadership, who is closely coordinating with us on the North Star Project.” 

The North Star Project: A New Source of Carbon Removal Credits 

The key asset in the deal is the North Star Bioenergy Carbon Capture and Storage (BECCS) project in Saskatchewan. The facility will capture carbon dioxide from the Meadow Lake Tribal Council Bioenergy Centre. This is how it works:

• This plant produces renewable electricity and heat using forestry waste biomass from nearby sawmills.
• Phase one of the project is designed to capture up to 140,000 tonnes of CO₂ per year from biomass combustion emissions.
• The captured carbon dioxide will move through a dedicated pipeline to a deep saline aquifer. There, it will be stored permanently underground.

This process removes carbon from the natural cycle because biomass absorbs CO₂ while growing. Capturing and storing that carbon after combustion results in net negative emissions.

The project will generate durable carbon dioxide removal credits. Each credit represents one ton of CO₂ removed. These credits can be sold to companies seeking verified carbon removal to meet climate targets.

Carbon Alpha had already developed the project structure and storage system before the acquisition. Svante now takes over development and integration. The next step will be a front-end engineering design (FEED) study and test-well drilling program. A final investment decision is expected in early 2027.

Industry analysts say deals like this show how the carbon removal sector is shifting from research to deployment. Companies are now building full systems that include capture, transport, and long-term storage. 

• RELATED: World’s First Commercial CCS Plant Owned by Shell, Equinor, and TotalEnergies Injects CO2 in North Sea

Building an End-to-End Carbon Management Platform

The acquisition expands Svante’s strategy to build an integrated carbon management company. It develops modular carbon capture systems that use nanoengineered solid sorbent filters to capture CO₂ from industrial emissions.

The technology is designed for industries that are difficult to decarbonize. These include cement, steel, hydrogen production, and power generation.

Before the acquisition, Svante already had expertise in capture technology. Carbon Alpha adds expertise in project development, geological storage, and carbon credit generation. This combination creates a full value chain for CCS in Canada:

1. Capture CO₂ from industrial sources or biomass energy
2. Transport the CO₂ through pipelines
3. Store the carbon permanently underground
4. Generate verified carbon removal credits

Industry experts say this type of integration is important. Carbon removal projects often fail because separate companies handle capture, storage, and financing.

The strategic acquisition includes Carbon Alpha’s development expertise, North Star Carbon Solutions LP’s ownership structure, and eligibility for Canada’s 50% CCUS investment tax credit, positioning Svante to scale multiple BECCS projects rapidly.

By combining these elements, Svante aims to scale projects faster.

• RELATED: Svante Opens World’s First Gigafactory for Carbon Capture in Canada

First Nations Partnership Anchors the Project in Saskatchewan

The North Star project is being developed in partnership with the Meadow Lake Tribal Council (MLTC). The organization represents nine First Nations communities in northwest Saskatchewan.

Under the project structure, MLTC will be a co-owner of the BECCS facility alongside Svante. The partnership focuses on three main goals: local economic development, job creation, and long-term environmental leadership.

The bioenergy facility already produces renewable electricity and heat using forestry residues. The carbon capture system adds another layer of value. It turns the facility into a carbon removal hub that can produce verified CDR credits.

The project also includes the development of a regional CO₂ pipeline and storage hub. This infrastructure could support other emitters in the region. 

Biogenic carbon sources from forestry, agriculture, or bioenergy plants could connect to the same storage network. This approach could turn the region into a carbon removal cluster.

Global Demand for Carbon Removal Is Rising Fast

The acquisition comes at a time when demand for carbon removal is increasing worldwide. Most countries now include carbon removal in long-term climate plans. Industry groups expect global carbon removal markets to reach hundreds of millions of tonnes of capacity by the 2030s.

Boston Consulting Group (BCG) outlines three demand scenarios for 2030–2040: low (40–80 MtCO₂/year), medium (70–230 MtCO₂/year), and high (200–870 MtCO₂/year). McKinsey also estimates durable CDR demand could hit 100 MtCO₂ by 2030, with announced supply at ~50 MtCO₂, creating a supply-demand gap.

The Intergovernmental Panel on Climate Change says that limiting global warming to 1.5°C will require removing billions of tonnes of CO₂ annually by mid-century. Many climate models further show that 5 to 10 billion tonnes of carbon removal per year may be needed by 2050. That translates to between $6 – $16 trillion of investment by mid-century. 

Today, global carbon removal capacity is still very small. Most engineered projects remove only thousands or tens of thousands of tonnes annually.

However, investment is rising quickly. Major corporations such as Microsoft, Stripe, and Alphabet have signed large contracts for high-quality carbon removal credits.

Governments are also supporting the sector. In Canada, carbon capture projects can receive financial support through the CCUS investment tax credit. This covers up to 50% of eligible capture equipment costs, depending on project type. These incentives aim to help scale early infrastructure.

At 140,000 tCO₂/year, North Star Phase 1 represents about 35x the capacity of Climeworks‘ Orca plant. It also aligns with Microsoft‘s annual CDR purchasing scale, demonstrating commercial viability for durable removal credits.

Why BECCS Is a Key Carbon Removal Technology

Bioenergy with carbon capture and storage is one of the most widely studied carbon removal technologies. BECCS combines three steps:

1. Biomass absorbs CO₂ while growing.
2. The biomass is used to produce energy.
3. Carbon emissions are captured and stored underground.

This creates net negative emissions. The technology also produces electricity or heat, which can improve project economics. However, large-scale BECCS projects require several conditions, including: 

• sustainable biomass supply
• reliable geological storage
• carbon capture technology
• carbon credit markets

North Star aims to bring these elements together.

Canada has strong potential for BECCS development because of its forestry resources and suitable geological formations. Western Canada already hosts major CCS infrastructure. For example, large carbon storage reservoirs exist in Alberta and Saskatchewan.

Map of Canada showing saline formations and sedimentary basins

This geological capacity could store billions of tonnes of CO₂ over time. Developers say regional storage hubs will be essential for scaling carbon removal.

The Next Phase for Carbon Removal Infrastructure

The acquisition of Carbon Alpha marks an important step in the industrialization of carbon removal. Instead of isolated pilot projects, companies are now building complete carbon management systems.

For Svante, the deal strengthens its ability to build and operate large carbon removal projects. For the broader market, it shows how carbon removal is moving from concept to infrastructure.

As governments and companies push toward net-zero targets, the demand for durable carbon removal credits is expected to keep rising. Projects like North Star may become an important part of the global climate strategy.

• READ MORE: Deep Sky and Skyrenu Launch North America’s First Direct Air Capture (DAC) Storage Facility

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