EU Sets Ambitious 2040 Climate Goal

In a significant move towards achieving climate neutrality by 2050, the European Parliament and the Council have provisionally agreed to amend the EU Climate Law, setting a new target for the EU to reduce its net greenhouse gas emissions by 90% by 2040 compared to 1990 levels. This ambitious target underscores the EU’s commitment to leading global efforts in combating climate change.

The agreement, reached late Tuesday evening, introduces flexible measures to ensure the target is met without compromising the EU’s competitiveness. Notably, from 2036, member states may count up to five percentage points of their emissions reductions from high-quality international carbon credits, aligning with the Paris Agreement. This is an increase from the initially proposed three percentage points by the European Commission.

Furthermore, the implementation of the EU emissions trading system (ETS2), which addresses CO2 emissions from buildings and road transport, will be delayed by a year to 2028. The European Commission will continue to assess various options for integrating international credits into future climate legislation, aiming to maintain the stability of the overarching EU Emissions Trading System (ETS).

To monitor progress and adapt to emerging scientific and economic developments, the Commission will conduct biennial reviews. These assessments will consider the latest scientific data, technological advancements, and the impact on the EU’s international competitiveness and energy pricing trends. Depending on the findings, the Commission may propose further amendments to the Climate Law to enhance the EU’s industrial competitiveness or adjust the 2040 emissions reduction target.

The provisional agreement will now move to the Parliament for a vote and must also be endorsed by the Council. If approved, the amendment will become effective 20 days after its publication in the EU Official Journal, marking a crucial step forward in the EU’s legal framework to achieve climate neutrality.