The EU has agreed on a target to reduce emissions by 90% by 2040 in accordance with the revised climate law
Negotiators from the European Parliament and the European Council have reached a preliminary political agreement on amendments to the EU Climate Law setting a new binding interim climate target for 2040. According to the agreement, the EU will reduce net greenhouse gas emissions by 90 percent by 2040 compared to 1990 levels, which will strengthen the bloc's commitment to climate neutrality by 2050.
The agreement provides additional flexibility in how member states can achieve the 2040 target, reflecting the view of both Parliament and the Council that the transition to a green economy should be accompanied by efforts to strengthen the EU's competitiveness. Starting in 2036, the required reduction in emissions can be achieved by five percentage points through the use of high-quality international carbon credits that comply with the Paris Agreement. This represents a higher premium than originally proposed by the European Commission. At the insistence of Parliament, safeguards have been added to ensure that such loans are not used to finance projects in partner countries that run counter to the EU's strategic interests.
Commission to assess the role of carbon Credits and Protect the Integrity of the ETS
In parallel, the Commission pledged to continue analyzing the role of international carbon credits in upcoming climate legislation related to the 2040 goal. At the same time, the need to preserve the stability and integrity of the EU Emissions Trading System (ETS) was emphasized.
The agreement will also allow for continuous carbon sequestration within the country to offset emissions that are difficult to reduce under the ETS, while increasing flexibility across all sectors and policy instruments to ensure cost-effective emission reductions.
ETS2 implementation postponed to 2028
As part of a compromise solution, the negotiators agreed to postpone the start of ETS2 by one year. The new system, which covers emissions from fuel combustion in buildings and on road transport, will now become operational in 2028, rather than in 2027. The deferral is intended to provide additional time for implementation and to allow households, businesses and Member States to adapt to the new system.
The biennial review mechanism embedded in the revised Climate Act
The amended Climate Law introduces a structured two-year review cycle. The Commission will regularly assess progress towards achieving the 2040 target, taking into account the latest scientific evidence and technological developments.,