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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Three major global investors have joined forces to build a new renewable energy platform in North America. Brookfield Asset Management, Norges Bank Investment Management (NBIM), and British Columbia Investment Management Corporation (BCI) have launched a new company, Northview Energy.

Jehangir Vevaina, Chief Investment Officer for Brookfield’s Renewable Power & Transition group, remarked:

“This partnership marks the creation of a scalable platform for Brookfield and our partners. Northview Energy will be an owner of high-quality operating assets that deliver affordable and clean power to the grid, and the framework for future acquisitions provides a clear growth pathway for the vehicle to add de-risked, high-quality, cash-yielding assets delivering strong returns.”

Norway’s $2 Trillion Sovereign Fund Enters North American Renewables

The Northview Energy platform will own and acquire renewable energy infrastructure across the United States and Canada. It begins with a large portfolio of operating solar and wind projects.

The initial portfolio includes 22 utility-scale renewable assets with a total operating capacity of about 2.3 gigawatts (GW). The projects include 17 solar plants and five onshore wind farms.

These assets are spread across 11 U.S. states and six regional power markets. The projects are already operational and supply electricity to the grid.

The portfolio has an estimated enterprise value of about $2.6 billion. Each of the three partners will hold an equal 33.3% ownership stake in the new platform.

The launch of Northview Energy also marks an important step for NBIM. The firm manages Norway’s sovereign wealth fund, officially known as the Government Pension Fund Global. It is the largest sovereign wealth fund in the world, with assets of about $2 trillion.

NBIM will invest about $425 million to acquire its one-third stake in the renewable portfolio. This deal represents NBIM’s first renewable infrastructure investment in North America.

The partnership allows the fund to expand its real asset portfolio while supporting the growth of clean energy. Renewable infrastructure investments can generate stable income and help diversify long-term portfolios.

Institutional investors, such as pension funds and sovereign wealth funds, are putting more money into renewable energy. This trend has grown in recent years. These assets often offer predictable cash flows through long-term electricity contracts.

A Portfolio Built on Long-Term Power Contracts

The Northview platform focuses on operating renewable assets with contracted revenue. This model reduces investment risk. All projects in the initial portfolio have long-term power purchase agreements (PPAs) with strong buyers. These contracts have a weighted average remaining term of about 16 years.

PPAs allow companies to sell electricity at pre-agreed prices for many years. Utilities, corporations, and data centers often sign these contracts to secure a stable power supply.

For investors, long-term contracts create predictable revenue streams. This helps protect returns from energy price volatility.

Brookfield managed renewable companies that developed the projects. These include Deriva Energy, Scout Clean Energy, and Urban Grid. These developers built the wind and solar assets before transferring them to the new platform.

• SEE MORE: Renewables Plus Storage Surge as Battery Costs Drop to Record Low, BNEF Reports

A Clean Energy Platform Designed for Growth

The partners plan to expand the platform beyond the initial portfolio.

Northview Energy has already signed a framework agreement to pursue future renewable acquisitions. The partners may deploy up to $1.5 billion in additional equity capital for new investments.

Future acquisitions will focus on operating renewable assets across North America. These may include:

• Utility-scale solar farms
• Onshore wind projects
• Battery energy storage systems

The platform structure allows investors to buy multiple projects through a single vehicle. This approach can improve efficiency in operations, financing, and asset management.

The new platform will have a management team. They will oversee operations and future acquisitions. Subject to regulatory approvals, Northview Energy is expected to launch formally in the second quarter of 2026.

Strong Demand for Renewable Power in North America

North America remains one of the world’s most active markets for renewable energy investment. Demand for electricity is rising as industries electrify and digital infrastructure expands.

In 2024, renewable sources provided around 24.2% of total electricity in the U.S. This is an increase from 23.2% in 2023, as reported by the U.S. Energy Information Administration (EIA).

• Growth is expected to continue. By 2025, renewable energy accounted for nearly 26% of U.S. electricity generation and more than 36% of installed power capacity.

Wind and solar power are the main drivers of this growth. In 2024, the United States generated about 756,621 gigawatt-hours (GWh) of electricity from wind and solar combined. Wind produced 453,454 GWh, while solar generated 303,167 GWh.

Most new power plants are now renewable. Renewable energy made up over 90% of all new electricity capacity added in the U.S. in 2024, according to the Federal Energy Regulatory Commission (FERC). Solar alone represented over 81% of the new capacity added that year.

In 2026, US clean energy additions, led by solar and batteries, will shatter records with over 90% of new capacity from renewables. Despite challenges like grid limits, growth surges toward decarbonization goals.

Corporate demand for clean electricity is also growing rapidly. North America now leads the global corporate renewable procurement market. The region accounts for about 40% of global PPA activity, supported by strong demand from technology firms, manufacturers, and data-center operators.

• READ MORE: Amazon Tops Global Clean Energy Rankings With 40GW Renewable Projects, Says BNEF

These trends make operating renewable energy projects especially attractive to investors. Wind and solar assets can produce electricity immediately and generate stable revenue through long-term power contracts.

Large institutional investors, like Brookfield, BCI, and NBIM, use platforms like Northview Energy. These platforms give them access to a fast-growing market for clean electricity infrastructure in North America.

Institutional Investors are Driving the Energy Transition

The launch of Northview Energy highlights a broader trend in global infrastructure investment. Big pension funds, sovereign wealth funds, and asset managers are putting billions into renewable energy. They are also investing in clean infrastructure.

These investors typically seek assets with stable cash flows and long operating lives. Renewable energy projects often meet these criteria because they generate electricity for decades.

The partnership between Brookfield, BCI, and NBIM brings together three large pools of capital:

• Brookfield manages more than $1 trillion in assets globally, including about $247 billion in infrastructure.
• BCI manages approximately C$295 billion in assets for public-sector clients in Canada.
• NBIM oversees Norway’s sovereign wealth fund, valued at roughly $2 trillion.

The three investors can team up to build bigger renewable portfolios and enter new markets.

Platforms like Northview Energy also allow investors to scale investments quickly. Once the platform is established, it can acquire additional projects and grow its generation capacity over time.

A Long-Term Bet on Clean Power Infrastructure

Northview Energy is designed as a long-term infrastructure investment vehicle. With 2.3 GW of renewable capacity already in operation, the company starts with a significant footprint in the U.S. power market. The partners are also able to add more projects through the planned $1.5 billion equity investment pipeline.

If it succeeds, the platform could grow into more regions and technologies. This could happen as the North American energy shift speeds up. 

For institutional investors, the model offers a way to deploy large amounts of capital into clean energy infrastructure while generating predictable returns. And for the broader energy system, investments like this help expand the supply of renewable electricity needed to meet future demand.

• FURTHER READING: Clean Energy Investment Hits Record $2.3T in 2025, Says BloombergNEF: What Leads the Surge?

The post Brookfield, NBIM, and BCI Launch a $2.6 Billion Clean Energy Platform appeared first on Carbon Credits.

A war in the Middle East may increase demand for carbon credits if it continues for a long time. Analysts say energy supply disruptions from the conflict could push some industries back to higher‑emission fuels like coal. This, in turn, could raise emissions and force companies in regulated markets to buy more carbon credits.

The Middle East conflict has already disrupted liquefied natural gas (LNG) supplies. Qatar, a top LNG producer, has halted output at its largest LNG plant. This is due to disruptions in transport routes through the Strait of Hormuz. Qatar supplies about 20% of global LNG output.

LNG provides cleaner fuel for power generation than coal. When gas costs rise sharply or supply is limited, utilities sometimes increase coal use to meet electricity demand. Higher coal use increases carbon emissions. This can lead to higher demand for carbon credits in compliance markets.

Carbon Credits 101: How the Market Responds

A carbon credit represents one tonne of greenhouse gas emissions reduced, avoided, or removed from the atmosphere. Companies must hold carbon credits to meet emissions limits in regulated markets. These markets are part of government climate policy.

Compliance carbon markets, like emissions trading systems (ETS), require companies to lower their emissions. If they can’t, they must buy credits to stay within a limit.

Over 113 carbon pricing systems are in use worldwide. This includes ETS and carbon taxes, which cover about 28% of global greenhouse gas emissions.

In compliance markets, rising emissions usually increase demand for allowances or carbon credits. If companies cannot reduce emissions fast enough, they buy credits to stay compliant. Strong or rising demand can also influence credit prices.

Voluntary carbon markets exist separately from compliance markets. In voluntary markets, companies buy credits to meet internal climate goals, not legal limits.

The voluntary market is smaller but growing. The global voluntary carbon credit market is expected to rise from $1.88 billion in 2025 to $2.29 billion in 2026. It could reach $4.92 billion by 2030.

From Gas to Coal: When Utilities Flip the Switch

The Middle East conflict has pushed energy prices higher. Global natural gas and oil prices climbed because of risks to supply routes such as the Strait of Hormuz, a key passage for crude oil and LNG.  

When gas prices rise, utilities may switch from gas‑fired generation to coal, which is cheaper but emits more CO₂. Analysts observed that fuel switching happened in 2022 after Russia invaded Ukraine. European gas supply was disrupted, so utilities turned to burning more coal.

Coal prices have also risen in response to supply pressures. Some markets saw thermal coal prices climb about 26%, reaching highs not seen in more than two years.

Such shifts can put pressure on emissions limits in regulated markets. Higher emissions would require companies to buy more compliance credits to avoid penalties. This dynamic is central to why analysts say carbon credit demand could rise if disruptions persist.

Compliance Markets Under Pressure, So Who Pays the Price?

Compliance carbon markets form the largest portion of carbon credit demand. These include emissions trading systems in Europe, China, and the U.S., and expanding carbon pricing schemes globally. The Middle East conflict could affect these markets, which shows how energy security and climate policy are connected. 

Demand for carbon credits depends on how countries and companies aim to meet climate goals, like those in the Paris Agreement. This agreement aims to limit global warming to below 2°C. Compliance markets set legal limits, and voluntary markets support corporate climate goals.

If more companies switch to coal and emissions go up, compliance markets might see a higher demand for allowances or credits. This happens as companies try to stay within legal limits. This could result in higher carbon prices and tighter markets, depending on how regulators respond.

In the European Union Emissions Trading System (EU ETS), companies must hold allowances equal to their emissions, or face fines. The EU is considering reforms to improve market stability and balance supply and demand for allowances. This scheme has been a key tool for reducing emissions in Europe since 2005. 

In addition, more sectors are entering compliance markets. For example, China’s national ETS covers key industrial sources. It accounts for a big part of emissions from the world’s largest emitter.

Any rise in emissions from fuel switching could increase demand in these established markets. However, the exact impact will depend on how long energy disruptions continue and whether regulators adjust compliance caps or other rules.

Voluntary Market Volatility: Green Goals on Hold?

Global carbon pricing revenues topped over $100 billion in 2023 and in 2024. The World Bank reports that around $69 billion came from emissions trading systems and $33 billion from carbon taxes. This amount covers nearly 24% of global greenhouse gas emissions, which reflects the growing scale of these markets.

• RELATED: 2026 Could Redefine Voluntary and Compliance Carbon Market Convergence, with Japan Leading the Way

While compliance demand may rise if emissions increase, the outlook for the voluntary market could differ.

According to analysts, an energy crisis may temporarily constrain corporate spending on voluntary credits. High energy prices raise operating costs. This may lead companies to delay voluntary purchases as they will focus more on their core operations instead.

High-integrity voluntary markets have grown recently. This growth is driven by corporate net-zero commitments and new standards. Companies increasingly seek credits that meet quality criteria such as compliance eligibility, durability, and third‑party verification.

Sudden economic strains or changes in energy costs could quickly change how companies buy.

The Ripple Effect: Energy Security Meets Climate Action

A prolonged Middle East conflict could have ripple effects beyond energy prices. Disruptions to LNG supply may push some utilities toward higher‑emission fuels, raising emissions levels. That could drive demand for carbon credits in regulated markets where companies must meet emissions limits.

At the same time, short‑term pressures from high energy costs could slow voluntary demand as companies focus on operational priorities. The overall direction of carbon credit demand will depend on the duration of energy supply disruptions, policy responses by regulators, and the pace of the global energy transition.

Carbon markets are an evolving part of climate policy, linking energy markets and climate goals. As energy security concerns grow, the role of carbon credits in balancing compliance and emissions reductions may attract more attention from policymakers, investors, and companies in the coming years.

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

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