On 2 July, the European Commission tabled its long-awaited proposal to amend the EU Climate Law, putting forward a new, legally binding intermediate climate target of a 90% reduction in net greenhouse gas (GHG) emissions by 2040, compared to 1990 levels.
The newly proposed 2040 target marks a significant milestone in the EU’s climate trajectory, ensuring continuity and momentum toward the Union’s 2050 goal. The Commission’s move signals predictability and stability to European businesses and investors, reaffirming the EU’s long-term commitment to becoming the world’s first climate-neutral continent.
The Commission has proposed amendments to the European Climate Law aimed at establishing the right enabling environment to achieve the 2040 climate target, in line with a pragmatic and flexible approach. In particular, when designing future legislation to meet the proposed 2040 target, the Commission will consider, among other factors:
- A limited role for high-quality international credits starting from 2036, capped at 3% of 1990 net emissions, in accordance with Article 6 of the Paris Agreement.
- The use of domestic permanent removals in the EU Emissions Trading System (EU ETS) to address residual emissions from hard-to-abate sectors.
- Greater cross-sectoral flexibility to help achieve the target in a cost-effective way.
The Commission’s proposal for the 2040 climate target will now move forward to the European Parliament and the Council for negotiation and adoption under the ordinary legislative procedure.
The interim target is also aligned with and supported by a policy ecosystem that the Commission is designing to balance its sustainability objectives with the need to preserve the competitiveness of the European Industries.
To this end, on the same day, the European Commission released a Communication outlining the state of play and work ongoing in the delivery of the Clean Industrial Deal (CID), which will support the Union in meeting its ambitious climate targets.
Alongside highlighting important milestones recently achieved or planned as part of the implementation of the CID, the Communication also stresses the critical role of CCUS technologies in the decarbonisation of the EU energy system by 2040.
In order to complete the delivery of the Clean Industrial Deal, the Commission is working on the adoption of a series of initiatives, expected for the second half of 2025.
Read more about the European Commission’s proposal amending the EU Climate Law here.
Read more about the Communication on delivering the CID here.
