SERIOUS credibility questions hang over an EU plan to reduce carbon emissions by 40pc, according to an Irish thinktank on European and international affairs.
An over-supply of cheap international carbon credits purchased during the economic downturn means the new EU 2030 Climate Master Plan is "not as ambitious as it seems", according to the Institute of International and European Affairs (IIEA).
IIEA Senior Research Fellow Joseph Curtin said European companies were allowed to buy a certain amount of carbon credits internationally from projects in non-EU countries.
"Let's say there is a factory in China and they install a new renewable energy system.
"They can actually generate carbon credits for that, which they can then sell on," he said.
"A European company can then buy those credits instead of reducing their own emissions in their factory at home."
The EU is currently overachieving on its targets in the run up to 2020 "mostly because of the recession," according to Mr Curtin.
"Because the whole system has gone below its target they can carry those credits forward so we are overachieving in the near term and under achieving in the long term," he said.
"Companies have basically got 1.6bn tonnes of hot air banked as credits and they can use this for the new plan."
The IIEA report also found the 27pc target agreed for renewables and energy efficiency "barely go beyond current investment plans".
Mr Curtin said the 27pc target is achievable "more or less" on a business as usual basis.
The new plan includes a recognition that agriculture emissions should be treated differently from other emissions.
However, the IIEA said it remains to be seen how this will be implemented.
Agriculture Minister Simon Coveney said agriculture was "by far the biggest contributor to emissions in Ireland".
"We need both an abatement and an adaptation strategy for the realities of climate change as I see them," he said.