The European Union is broadly credited with reducing its emissions of greenhouse gases (GHGs) and is
on track to meet its goal of a 20% reduction in GHGs in 2020 compared to 1990 levels. But a full lifecycle
accounting of European member state carbon emissions, including those emissions caused through
consumption of imported goods, tells a different story: Under this accounting method, EU emissions
have actually grown by 11% – with some nations seeing substantially higher emissions growth than
others.

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These nations are taking advantage of the “carbon loophole” – an artifact of climate policy that fails to
consider a nation’s imports when calculating national emissions and associated climate commitments.
Research shows that as much as 23% of global greenhouse gas emissions pass through this loophole,
originating in regions with little or no carbon emissions regulation and ending in nations with an
increasingly regulated carbon market.

Unless and until the carbon loophole is closed, the world will struggle to meet global emissions targets
and avoid dangerous climate change. We cannot keep pushing industrial carbon emissions around the
world in an unaccountable manner.

This discussion draft of “Europe’s Carbon Loophole,” published in September of 2017, helps quantify the loophole for EU member states, and offers potential pathways to close the loophole through the Buy Clean suite of policy options.

For more information or to comment on this draft, please contact Helen Picot at helen.picot -at- climateworks – dot- org.