Q&A: EU proposes 2040 emissions reduction target
What is the EU’s 2040 climate target?
The European Union’s 2040 emissions reduction target is a legally binding amendment to the European Climate Law, agreed in 2021, which sets out the EU’s 55 percent net emissions reduction target for 2030 and its 2050 net-zero emissions goal.
The proposal tabled on 2nd July is for a net emissions reduction of 90 percent by 2040, based on 1990 levels. This follows a recommendation from the EU’s independent scientific advisory board to have a target of 90-95 percent.
Originally due to be proposed at the beginning of the year, the target faced delays and mounting political pressure. The Commission added certain flexibilities, aimed at making it more politically palatable. This included allowing a capped amount of international carbon credits to help reach the goal - a first for EU climate targets, as both the 2030 and 2050 targets have to be met with only domestic action. While the scientific advisory board has acknowledged that flexibilities could help facilitate the transition towards climate neutrality, it says this must not weaken ambition.
EU member state environment ministers in November 2025 decided to stick to the 90 percent target, but proposed broader flexibilities, which would further weaken the original proposal. They made the adjustments "to reflect concerns about the EU’s competitiveness, the need for a just and socially balanced transition, uncertainty related to natural removals and the diverse national circumstances across member states." EU governments aim to use international carbon credits for up to 5 percent of 1990 net emissions – effectively bringing the target down to 85+x% of domestic emissions reductions – and want the Commission to assess the target every two years with the option to adjust it.
How will international carbon credits be included?
For the first time, the European Commission has proposed the use of international carbon credits in achieving an emissions reduction target. These are achieved outside of the European Union but traded under the Paris Agreement, so that they count as action towards the EU’s target, rather than that of the country in which they occur. This can provide a “safety net” to ensure the target is achievable, the Commission says.
According to the decision by member state governments, their contribution will only be applicable between 2036 and 2040 and will be capped at 5 percent of 1990 emissions. They "should not play a role for compliance" in the EU Emissions Trading System for energy and large industry (EU ETS 1).
EU climate chief Wopke Hoekstra has said the credits need to be “high-quality” as well as verifiable, certifiable and additional. The Commission proposed they would be subject to an impact assessment and rules on their robustness, origin and use. Types of credits could include those from direct air carbon capture and storage and bioenergy with capture and storage.
However, the decision to include them is controversial and environmental organisations have criticised it as watering down the target. There are concerns about the environmental integrity of these and that they might drive green investment outside of the European Union. In June, the scientific advisory board flagged both these concerns and the chair of the board has reiterated them since.
What is the role of removals?
The “net” element of the target refers to the total amount of emissions that end up in the atmosphere - or gross emissions minus human and natural activities to remove them. These removals could be nature-based, where trees, soils and other natural processes take carbon from the atmosphere, or technical, permanent removals, where carbon is removed by technology and permanently stored - for instance, direct air carbon capture and storage (DAC).
According to the European Commission’s impact assessment for the target, the EU will achieve a gross emissions reduction of 75-85 percent by 2040, showing that removals are needed alongside emissions cuts.
Unlike the 2030 target, where there was an agreement to cap the contribution of removals, the Commission simply says that domestic removals will play “an increasingly important role” in reaching climate targets.
The Commission has been criticised for not adhering to calls to boost the target’s credibility and measurability by breaking it into three sub-targets: gross emissions, temporary removals and permanent removals. These calls included those from a group of over 100 academics, businesses, civil society organisations and research institutions and the scientific advisory board.
A recent study by Carbon Gap showed that separate targets were feasible and necessary and the group has criticised the Commission for not including this.
The European Commission also wants include domestic permanent carbon removals in the EU’s carbon pricing system to compensate for residual emissions from hard-to-abate sectors and build a stronger business case for these technologies and methods, a demand also made by member state governments. This has also drawn criticism from NGOs, including WWF and Climate Action Network Europe.
What are the reactions to the 2040 target?
Many environmental organisations see the inclusion of flexibilities as a weakening of the target. There is a lot of hesitation about including international carbon credits, but one consistent call is for the EU to ensure these meet strict criteria if they are used.
Following the deal by environment ministers to further weaken the original proposal, NGO alliance CAN Europe lamented a "disappointing outcome," where the inclusion of international carbon credits would divert resources away from domestic decarbonisation and undermine the integrity of the EU’s transition.
Researchers from think tank E3G warned that the flexibilities built into the final text should not be used as shortcuts to real emissions reduction. NGO Transport & Environment said the deal puts Europe’s climate leadership into question. Carbon Market Watch criticised that it "unfairly shifts some of the burden for domestic climate action to the Global South and future generations."
The solar sector has said that the target gives companies the much-needed confidence to continue investing in solar, storage, and electrification, and accelerating the energy transition.
How is the 2040 target linked to the EU's NDC?
The European Union also needed to submit its 2035 emissions reduction target as part of its updated climate ambition plan under the Paris Agreement - known as a Nationally Determined Contribution (NDC). Like many countries, it missed the original February 2025 deadline. The NDC needed to be agreed on by all 27 EU countries – rather than the qualified majority required to pass the 2040 target. Environment ministers approved the NDC as part of the deal on the 2040 target in early November.
Governments decided on a target range of reducing emissions by 66.25 to 72.5 percent by 2035.
Both the 2035 and 2040 targets are important to set a high bar for international climate ambition. This is particularly important following the United States pulling out of the Paris Agreement and as other countries are criticised for not handing in ambitious enough NDCs.
What happens next?
The amendment to the climate law needs to be agreed by EU countries and the European Parliament before it can become law. Member state governments agreed their position on 5 November and once Parliament adopts its own position, final negotiations can begin.
In the long term, the EU will need to assess what policy changes are required to reach the 2040 goal. The target will form the basis of post-2030 climate policy framework, similar to the Fit for 55 package, which was put together to reach the 2030 climate target. However, this time around, the Commission is emphasising simplification and flexibility. The timing of when to expect this legislation will be laid out in the Commission’s work programme for 2026.
