Germany and Italy are the biggest climate laggards in Europe, study finds

• The European Union risks missing its 2030 climate goals, with Germany and Italy lagging behind.
• The two countries may have to spend €15 billion on carbon credits to comply with a climate law.
• A carbon credit shortage could lead to a costly bidding war and legal issues for EU nations.

The European Union is at risk of missing its ambitious climate goals for 2030, and Germany and Italy are largely to blame.

The two countries are so far off track of cutting greenhouse gas emissions in industries like transportation and buildings that they could be forced to spend upwards of $16.1 billion (€15 billion) on carbon credits to comply with an EU law, according to research by T&E, a nonprofit that advocates for cleaner transportation.

There's just one problem: Germany and Italy could eat up the majority of credits available across the EU, setting up a costly bidding war by other countries that also miss their climate goals.

"Germany and Italy are eating up all available carbon credits from their neighbours, leaving them stranded and at risk of legal proceedings," Sofie Defour, climate director at T&E, said in a statement. "The German government will soon have to face its citizens asking for even more money and deepening the budget crisis yet further, to make up for their weak policies."

An EU climate law, known as the Effort Sharing Regulation, sets binding emissions reduction targets for each of the bloc's 27 countries. The overall goal is to slash emissions by 40% by 2030, compared to 2005 levels. The law applies to industries like transportation, buildings, and agriculture, which account for just under two-thirds of EU emissions.

Countries that miss their climate targets can buy credits from neighboring ones that outperform their goals.

Spain is expected to have the most surpluses, T&E found, followed by Greece and Poland. But at least 12 countries are on track to miss their national climate targets.

Attempts by countries including Germany, Italy, and France to slash emissions from agriculture and transportation have sparked protests by farmers and citizens worried they will push up the costs and make EU products more expensive than imports.

The backlash helped the far-right gain seats in the European Parliament following the election this month.

Defour said countries face a choice: pay billions to their neighbors for their carbon debt or implement stronger climate policies, such as insulating houses to make them more energy efficient.