By 2040, the European Union is committed to reducing its greenhouse gas emissions by 90% compared to 1990 levels. The new agreement provides for flexibility mechanisms, including the limited use of international credits, to support the transition to a decarbonized economy.
At the end of 2025, the European Commission reached a political agreement with the European Parliament and Member States on new climate targets for 2040. The regulation is seen by European institutions as a milestone to accelerate decarbonization and offer a clear path for the bloc's economy until 2050.
The text establishes a goal of reducing emissions by 90% and defines rules for its implementation.
“Today the EU demonstrates our strong commitment to climate protection and the Paris Agreement. One month after COP30, we have turned words into action, with a legally binding target of reducing emissions by 90% by 2040. We have a clear direction towards climate neutrality and a pragmatic and flexible plan to make the transition to a clean economy more competitive.” Ursula von der Leyen, President of the European Commission
Based on the current economic and geopolitical landscape, the agreement was structured flexibly to enable the achievement of climate goals:
5% rule
From 2036 onwards, EU countries will be able to meet up to 5% of their climate target with international carbon credits linked to projects carried out outside Europe. In practice, this means that at least 85% of emissions reductions must occur within the EU itself. European UnionThe use of these credits will be limited, strictly controlled, and tested beforehand in a pilot phase between 2031 and 2035, following the rules of the Paris Agreement.
Offsetting emissions that are difficult to eliminate
The new law allows the use of permanent carbon removal methods, such as CO₂ capture and storage, within the European Emissions Trading System (EU ETS), to offset residual emissions that are difficult to neutralize, especially in heavy industrial sectors.
More flexibility between sectors
Member States will have greater freedom to offset deficits in one sector with gains in another, provided the final emissions reduction target is achieved. The measure aims to reduce costs and make the climate transition more economically efficient.
Guidelines for the post-2030 period
The agreement reinforces that European climate policy should strengthen the competitiveness of industry, ensure a just and socially balanced transition, prioritize clean and innovative technologies, and expand the use of renewable energies.
“This agreement is pragmatic and ambitious, offering speed, predictability, and flexibility. It shows that climate, competitiveness, and independence go hand in hand and sends a strong message to our global partners.”
Wopke Hoekstra, European Commissioner for Climate, Net Zero Emissions and Clean Growth
With the new agreement, the EU aims to boost investment in innovation, stimulate job creation, and strengthen the bloc's energy independence.
The European Climate Law has been in force since July 2021 and sets the goal of achieving climate neutrality by 2050, as well as a reduction of at least 55% in net emissions by 2030, compared to 1990. The proposed target for 2040 was presented in July 2025 and also served as the basis for the EU's new Nationally Determined Contribution (NDC) under the Paris Agreement, presented at COP30.
“Climate actions over the next ten years will be crucial to avoiding tipping points in the Earth’s climate system. The 2040 target reflects the urgency of the challenge and offers legal certainty for investments and a deep and fair decarbonization of the European economy.” Teresa Ribera, Executive Vice President for a Just, Sustainable and Competitive Transition.
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