The European Union has made significant progress in reducing greenhouse gas emissions within its borders, but a substantial share of its overall carbon footprint continues to originate overseas. According to data from the European Climate Foundation (ECF) and climate consultancy Matière, approximately 35% of the EU’s carbon footprint was generated abroad in 2023. The findings highlight the growing importance of **trade emissions** as Europe attempts to reconcile ambitious domestic climate policies with its dependence on imported goods.
More than one-fifth of global greenhouse gas emissions are now associated with international trade. The Traded Emissions Tracker, covering 45 major economies between 2010 and 2023, indicates that emissions associated with trade have grown faster than global emissions overall. In several EU countries—including Ireland, Sweden, Austria, Cyprus, Malta and Spain—imports represented more than 40% of national carbon footprints in 2023 when trade within the EU is excluded.
China is particularly important to this challenge. Europe imports large quantities of Chinese solar panels, batteries, electric vehicles, machinery and critical materials. While many of these products support Europe’s transition toward cleaner energy, producing them can generate substantial emissions elsewhere. China accounted for 27.2% of global consumption-linked greenhouse gas emissions in 2023, compared with 7.8% for the EU.
The report argues that international cooperation could therefore be more effective at reducing **trade emissions** than relying primarily on border controls. Aligning environmental and product standards between China and the EU could affect trade flows representing around 7% of global emissions and almost one-third of emissions connected with international trade. Common standards could encourage manufacturers to adopt cleaner production methods while reducing the need to assess the carbon content of individual products at European borders.
The EU has already introduced policies designed to address emissions embedded in imports. The Carbon Border Adjustment Mechanism (CBAM) applies a carbon price to certain carbon-intensive imported products. The EU Deforestation Regulation also aims to prevent commodities associated with deforestation or forest degradation from entering the European market. However, the report argues that these measures should be complemented by deeper cooperation with major trading partners.
Another possibility is reshoring manufacturing to Europe. Yet bringing production back to the EU would not automatically reduce **trade emissions**. If European factories rely on carbon-intensive energy or inefficient production methods, reshoring could simply relocate emissions rather than eliminate them. Effective climate policy must therefore focus on reducing the carbon intensity of production regardless of where manufacturing occurs.
The findings suggest that climate policy may increasingly need to move beyond territorial emissions targets. While governments traditionally measure emissions generated within their borders, consumption-based accounting also considers emissions embedded in imported goods. France, Denmark and the Netherlands are beginning to explore policies addressing imported emissions, although no country has yet established a formal reduction target.
Ultimately, tackling **trade emissions** will require a combination of carbon pricing, cleaner supply chains, common environmental standards and international cooperation. For the EU, working with China and other major trading partners could become an increasingly important part of achieving meaningful global emissions reductions.