Can the Paris Agreement Crediting Mechanism deliver the integrity the EU is looking for? A panel discussion

At this month’s European Climate Summit in Barcelona, Climate Focus and Perspectives Climate Research co-organized a panel to discuss one of the most consequential questions facing EU climate policy today: can the Paris Agreement Crediting Mechanism (PACM) deliver the integrity the EU is looking for?

The session – titled “The PACM as Quality Benchmark for the European Context” – brought together Climate Focus Senior Consultant Anna Kovács and Perspectives Climate Research Managing Director Sergi Cuadrat, alongside Kristian Brüning (UpEnergy), Stefano De Clara (ICAP), and Pedro Martins Barata (ICVCM), with moderation by Tobias Hunzai (associate of Climate Focus).

What does “high integrity” mean for international carbon credits in the EU?

The discussion centered on how the EU should define “high integrity” for international carbon credits under Article 6 of the Paris Agreement, and whether the PACM is the right benchmark to anchor that definition. Panelists explored the risk of rulemaking that is either too vague to drive investment or too stringent to attract it, and what a workable, phased approach to EU eligibility criteria might look like.

Kovács highlighted the stakes clearly: “Right now there is no common understanding of high integrity,” she noted during her presentation – underscoring that the EU’s upcoming Implementation Package will need to fill that gap with clarity and ambition in equal measure. Cuadrat mentioned that “PACM is the right quality baseline, but the EU should build on it, not replace it.”

Panelists stated that the road to defining high integrity depends heavily on why the EU is allowing international credits in the first place. Purpose shapes integrity, and that purpose still needs to be clearly defined.

Panelists also pushed back against the idea of leaning entirely on the PACM. They argued that the EU should establish its own criteria on top of PACM, keeping meaningful control at the EU level rather than outsourcing standards to an external system.

Publication developers added a dose of market reality. They are navigating a patchwork of requirements from different buyers, constantly adapting to shifting goalposts, or placing their hopes in a single buyer. More quality criteria at the EU level could be a good thing, but given the ongoing political debates around EU ETS stringency, CBAM, and international credits, developers are hoping for clarity and simplicity, not more layers of complexity.

There is also a bigger opportunity on the table. As a potentially major buyer, the EU has real power to shape global carbon market standards. A clear, credible EU benchmark could become the market norm worldwide. And while international credits in the EU will not kick in until 2036-2040 (with a pilot from 2031-2035), integrity criteria cannot wait. Carbon publications take years to develop, and the signals the EU sends today will determine what supply looks like a decade from now.

Media coverage of the event

The panel’s insights resonated beyond the conference room. Key findings were picked up by two leading carbon market publications:

Quantum Commodity Intelligence reported on the range of views shared by the panel and by the audience, echoing the panel’s assessment that the absence of a shared definition of “high integrity” remains a central unresolved challenge for the EU’s Article 6 framework.

Carbon Pulse covered the panel’s broader debate on whether the EU risks “overcorrecting” on integrity standards – drawing on lessons from the CDM era – and reported on Cuadrat’s call for a more calibrated approach to PACM’s conservativeness rules.

Together, the two articles reflect the breadth of the debate the panel surfaced. With the European Commission’s impact assessment expected in June and the implementation package to follow, these are questions the sector will need to keep working through – and ones Climate Focus will continue to engage with closely.