The European Parliament has approved a new legally binding climate target requiring the European Union to reduce greenhouse gas emissions by 90 percent by 2040 compared with 1990 levels. The measure forms part of the EU’s long-term pathway toward climate neutrality by 2050 and introduces a new intermediate milestone between the existing 2030 and 2050 objectives. Members of the European Parliament voted in favor of revising the EU Climate Law to include the new 2040 target.
Additional flexibility through carbon credits and removals
The updated legislation introduces additional flexibility for member states in achieving the 2040 goal. From 2036 onward, up to five percentage points of the required emissions reductions may be met through the use of high-quality international carbon credits. This represents an increase of two percentage points compared with the European Commission’s original proposal. Safeguards have been included to ensure that such credits do not support projects that conflict with the EU’s strategic interests.
The law also allows the use of permanent domestic carbon removals to offset hard-to-abate emissions within the EU Emissions Trading System (ETS). In addition, it provides greater flexibility across sectors and policy instruments to help achieve the target in a more cost-effective manner while preserving industrial competitiveness.
ETS 2 launch delayed and progress reviews introduced
As part of the revision, the start of ETS 2, which covers emissions from buildings and road transport, has been postponed by one year, from 2027 to 2028.
The European Commission will conduct reviews of progress toward the 2040 target every two years. These assessments will take into account updated scientific findings, technological developments, energy prices, and industrial competitiveness. Based on the results, the Commission may propose adjustments to the target or introduce additional support measures.
The revised law will enter into force 20 days after formal approval by the Council and publication in the EU’s Official Journal. The existing Climate Law already mandates a 55 percent emissions reduction by 2030.
