EU emissions continue to fall as clean energy gains ground
The European Commission has today published the 2026 EU Climate Action Progress Report and Carbon Market Report, showing that EU greenhouse gas (GHG) emissions continue to fall, clean technologies are expanding, and an increasing amount of ETS revenues are available to EU Member States for investments in decarbonisation. These developments show how the clean transition continues to support the EU’s wider objectives of strengthening competitiveness, enhancing energy security, reducing dependencies and becoming climate resilient.
The Climate Action Progress Report confirms that EU net GHG emissions fell by 1.6% in 2025 compared to 2024, according to provisional data. Emissions covered by the EU Emissions Trading System (EU ETS) decreased by around 2% in 2025, while emissions in sectors covered by the Effort Sharing Regulation (ESR) remained broadly stable, and provisional data show an improvement in the EU land carbon sink. Emissions are now 39% below 1990 levels, while the EU economy has grown by 74% over the same period, decoupling one more year the growth of our economy from its decarbonisation, further reducing emissions. This year’s Carbon Market Report also finds that EU ETS revenues grew to €43.2 billion in 2025, an 11% increase compared to 2024.
The EU also strengthened its longer-term climate framework this year by establishing a legally binding target to reduce net GHG emissions by 90% by 2040 compared to 1990 levels, with the entry into force of the amended European Climate Law in April 2026.
Stepping up 2030 implementation across the EU
While the EU remains fully committed to reducing net GHG emissions by at least 55% by 2030, the slower pace of emission reductions in 2025 means that efforts will need to accelerate across the economy in the second half of the decade.
The report indicates that emissions covered by the Effort Sharing Regulation (including domestic transport, buildings, agriculture and waste) are currently expected to fall by around 38.5% by 2030 compared with 2005, slightly below the EU-wide target of 40%. The assessment shows that nine EU Member States are not making sufficient progress towards meeting their 2030 ESR targets. The Commission will request that Austria, Croatia, Cyprus, Germany, Italy, Ireland, Lithuania, Malta and Sweden each submit a corrective action plan to accelerate the implementation and development of emission reduction measures and investments.
Provisional data show that net carbon removals from the land sector increased by around 11% in 2025 compared to 2024. Despite this improvement, current projections for the land sector also indicate a gap of 40–55 million tonnes of CO₂ equivalent towards the EU’s 2030 land-use target.
Clean transition strengthens energy security and competitiveness
The accelerated deployment of clean technologies in 2025 continues to help reduce Europe’s dependence on imported fossil fuels and limit the impacts of volatile fuel prices on citizens and businesses. While EU cleantech manufacturing has expanded significantly, the report highlights that further economic opportunities for European industry can still be captured, which will as a result mobilise investment. Registrations of battery-electric cars increased to 1.9 million in 2025, the equivalent of roughly one in six new car registrations. EU wind and solar capacity increased to 611 GW, or around 49% of total electricity generation capacity. The installation of heat pumps also accelerated, with estimated 41 GW of additional capacity installed in 2025, up from 26 GW in 2024.
Climate resilience increasingly urgent
Climate-related extreme events have caused an estimated €822 billion in economic losses in the EU since 1980. Around €70 billion per year will need to be invested in adaptation up to 2050. The reports emphasise the rapidly growing impacts of climate change, with severe impacts in 2026.
The new EU Climate Resilience Framework, presented in October 2026, will strengthen Europe’s ability to anticipate, prepare for, and manage climate risks with a proposed Climate Resilience Law underpinned by a common reference trajectory for global warming.
EU ETS continues to be a well-functioning carbon market
The 2026 Carbon Market Report shows that EU ETS revenues amount to €43.2 billion in 2025. More than half this amount (€23.9 billion) went directly to EU Member States to finance decarbonisation measures for households and industry. Increasing the share of ETS revenues invested in decarbonisation, and maintaining the system’s integrity, will ensure that the EU ETS meets its 2030 target of a 62% emissions cut below 2005 levels.
Emissions from industrial installations decreased by 3.3% from 2024, mostly driven by the iron and steel, cement, and chemical sectors. Maritime transport emissions decreased by 4% while aviation emissions grew by 0.2%, confirming the pressing need to decarbonise this sector. While overall ETS emissions remain below the cap, emission reductions have slowed compared to previous years. In July 2026, the Commission proposed a reform of the EU ETS for the decade 2030-2040.
Background
The Climate Action Progress Report shows annual progress towards the EU’s emission reduction targets and includes information on different climate policy areas, legislative progress, climate finance and adaptation. The Carbon Market Report is an annual stocktake of the functioning of the EU ETS.
