EU sets legally binding 90% emissions target for 2040

The Council of the European Union has formally approved an amendment to the EU environmental law, setting a legally binding target to reduce net greenhouse gas (GHG) emissions by 90% by 2040 against 1990 levels. The decision marks the final legislative step following the European Parliament's earlier adoption of its position.

A European city is transitioning towards a greener and more sustainable future. AI generated picture.

The 2040 target serves as an intermediate milestone on the path to the EU's legally binding objective of full environmental neutrality by 2050. It will inform the bloc's environmental and energy policy framework beyond 2030 and shape upcoming legislative proposals from the European Commission.

The revised law introduces a series of flexibilities to ease the transition for member states and industry. From 2036, a limited volume of high-quality international carbon credits can be counted toward the target. The framework also recognises a role for permanent carbon removals in addressing residual emissions from hard-to-abate sectors—those where emissions are technically or economically difficult to eliminate.

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Alongside the emissions target, the law postpones the start of the EU's new emissions trading system (ETS2) for road transport, buildings, and other sectors by one year, from 2027 to 2028. The broader framework is designed to reconcile green ambitions with economic competitiveness, energy security, and a fair transition for affected communities.

'Today's adoption of the landmark 2040 climate target will give industry, citizens and investors the reassurance they need for the clean transition in the decade ahead,' said Maria Panayiotou, Cyprus' environment minister.

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The inclusion of international carbon credits in the EU's compliance framework signals a growing recognition of the verified carbon market as a tool for meeting large-scale environmental action targets. Green Earth develops and manages a portfolio of high-quality, verified nature-based carbon projects across continents, generating carbon credits that meet international standards.