EU Charts a Bold Course to 2040 with New Climate Target
Overview
The European Commission has proposed a new climate target: a 90% reduction in net greenhouse gas emissions by 2040, compared to 1990 levels. This ambitious move aims to solidify Europe’s leadership in clean energy, boost industrial innovation, and ensure a fair, resilient transition to climate neutrality by 2050.
A Clear Path to Climate Neutrality
The EU’s updated Climate Law amendment sets a new milestone: a 90% cut in net GHG emissions by 2040. Building on the legally binding 2030 target of a 55% reduction, this proposal is designed to provide long-term certainty for investors and industries. It reflects a pragmatic and flexible approach, ensuring that Europe remains on track for full decarbonisation by 2050.
Flexibility and Fairness at the Core
Unlike previous frameworks, the 2040 target introduces new flexibilities. These include:
Limited use of high-quality international carbon credits starting in 2036.
Domestic carbon removals integrated into the EU Emissions Trading System (EU ETS).
Sectoral flexibility, allowing overperformance in one area (e.g., transport) to offset underperformance in another (e.g., land use).
This approach aims to make the transition cost-effective and socially fair, accommodating national specificities and economic realities.
Clean Industrial Deal: Powering the Transition
To support the 2040 goal, the Commission is rolling out the Clean Industrial Deal, a comprehensive strategy to align competitiveness with decarbonisation. Key initiatives include:
A new State Aid Framework to boost clean energy investments.
Simplified Carbon Border Adjustment Mechanism (CBAM) rules, reducing red tape for 90% of importers.
Tax incentives like accelerated depreciation and credits to stimulate clean tech adoption.
Support for Power Purchase Agreements, grid manufacturing, and a pilot Industrial Decarbonisation Bank.
These measures aim to create jobs, drive innovation, and ensure Europe’s energy independence.
Global Leadership and COP30 Readiness
The EU’s 2040 target sends a strong signal ahead of COP30 in Brazil: Europe is committed to the Paris Agreement and global climate leadership. The Commission will now work with the Council Presidency to finalize the EU’s updated Nationally Determined Contribution (NDC), reinforcing its role as a climate frontrunner.
The proposal will now move to the European Parliament and Council for discussion and adoption. Once agreed, it will shape the post-2030 climate policy framework and guide the EU’s journey to net-zero emissions by 2050.
