2040 climate target: Council and Parliament agree on a 90% emissions reduction
The Council presidency and the European Parliament’s representatives have today reached a provisional agreement on amending the European climate law (ECL), introducing a binding intermediate climate target for 2040 of a 90% reduction in net greenhouse gas (GHG) emissions compared to 1990 levels. This new target is a crucial step towards the EU’s long-term goal of achieving climate neutrality by 2050.
The agreement also sets out certain areas of flexibility to support the achievement of the 2040 target and several key elements that should be reflected in the post-2030 climate framework. These will steer the Commission’s future legislative proposals to enable the EU to achieve the 2040 target, while helping European industry and citizens throughout the transition.
The agreement also confirms that both co-legislators support postponing the entry into application of the EU emissions trading system for buildings and road transport (ETS2) by one year.
“Today, Europe has united around our clear direction for climate policy – based in science and protecting our security and competitiveness. The agreement on a 2040 target between the Council and the European Parliament is crucial, and I am truly proud of what we have achieved together. The target delivers on the need for climate action while safeguarding our competitiveness and security. And with the 2040 target in hand, we can now focus on delivering the policies and cooperation needed to move Europe toward a more sustainable, safe and prosperous future.” (Lars Aagaard, Denmark’s minister for climate, energy and utilities).
Main elements of the agreement
The co-legislators’ agreement includes:
- setting a binding 90% reduction target for net GHG emissions by 2040 as proposed by the Commission
- further clarification and additions to the flexibilities proposed by the Commission, including on the contribution of high-quality international carbon credits to the target, the role of domestic permanent carbon removals under the EU ETS, and enhanced flexibility within and across sectors and instruments.
- further developing the principles of the enabling framework for the post-2030 climate architecture, with a focus that includes competitiveness, simplification, social fairness and national circumstances, energy security and affordability, support for innovation and investment, the realistic contribution of carbon removals to achieving the overall target, and maintaining, managing and enhancing natural sinks in the long term
- reinforcing the review mechanism, including with regular assessment of the progress made towards achieving the targets on competitiveness, energy prices and the level of net removals, as well as a requirement for the Commission to propose revisions to the climate law or additional measures where needed in order to strengthen the enabling framework
- postponing the start of the EU ETS2 by one year, from 2027 to 2028
Role of international credits
The provisional agreement includes a balanced approach to the role of international carbon credits in the post-2030 climate framework. The co-legislators agreed to allow, from 2036 onwards, the use of high-quality international credits to make an adequate contribution towards the 2040 target, up to 5% of 1990 EU net emissions. This corresponds to achieving domestic emission reductions of 85% by 2040. A pilot phase for 2031–2035 may also be established to support the development of a high-integrity international credit market.
Furthermore, the co-legislators introduce additional safeguards to guide the Commission in preparing the future rules on the use of international credits under the post-2030 climate architecture to ensure the integrity of credits. Where appropriate, the Commission must consider complementing the criteria laid out in the Paris Agreement when establishing the rules for international credits.
The co-legislators also reached a compromise on the scope of potential flexibilities to be examined in the context of the review of the climate law. Among other things, the review will cover the potential use by member states of additional high-quality international credits to fulfil up to 5% of their post-2030 targets and efforts.
Next steps
The agreement reached by the Council and Parliament is provisional, pending formal endorsement and adoption by both institutions.
Background
First adopted in 2021, the European climate law provides the legal basis for the EU’s long-term climate policies, in line with the Paris Agreement. It sets a binding economy-wide climate neutrality target by 2050 and a 2030 objective of reducing net emissions by at least 55%. It also provides for the establishment of an intermediate climate target for 2040.
After publishing the communication ‘Europe’s 2040 climate target’ in February 2024, the European Commission put forward a proposal on 2 July 2025 to amend the European climate law to set a 2040 target.
More recently, in October 2025, the European Council provided strategic guidance on the way forward towards establishing a target for 2040. In particular, leaders emphasised the need for a balanced approach that would preserve and boost the EU’s competitiveness, while ensuring a socially fair transition. They also stressed the need to take the uncertainties surrounding natural removals into account. The European Council also called on the Commission to further develop the necessary enabling conditions to support European industry and citizens in achieving the 2040 target.
On 5 November 2025, EU environment ministers agreed on the Council’s position on the amendment to the European climate law, while the European Parliament adopted its negotiating position on 13 November.
