Climate, European turning point: agreement on a 90% reduction in emissions by 2040. More flexibility for member states and postponement of ETS2.
The EU reaches a historic agreement: a 90% reduction in emissions by 2040, greater flexibility for Member States, a postponement of ETS2, and biennial reviews to combine the green transition and industrial competitiveness.
Climate, European turning point: agreement on a 90% reduction in emissions by 2040. More flexibility for member states and postponement of ETS2.
The European Union has taken a decisive step in the fight against climate change. The European Parliament and the Council have reached a provisional political agreement on a new interim target in EU climate legislation: reduce net greenhouse gas emissions by 90% by 2040, compared to 1990 levels. This is an essential step to maintain the path towards climate neutrality by 2050, a cornerstone of the European Climate Law.
The agreement comes at the end of complex negotiations that sought to balance environmental ambition, economic sustainability, and industrial competitiveness. The institutions maintain that the ecological transition must not hinder Europe's production capacity but become a lever for innovation.
International carbon credits: greater flexibility from 2036
A key point of the agreement concerns the use of international carbon credits. From 2036, member states will be able to cover up to five percentage points of the overall reduction through certified credits from projects abroad. This represents an increase compared to the Commission's initial proposal.
To avoid excesses or abuses, stringent guarantees have been added at the request of the European Parliament: the credits cannot finance projects in countries whose plans conflict with the strategic interests of the Union. A way to prevent climate tools from being exploited for unwanted geopolitical influence.
In parallel, the Commission will assess the role of international credits in future climate legislation, with the aim of preserving the stability of the ETS, the emissions trading system that is one of the pillars of European environmental policy.
More margins for states: carbon removals and sectoral instruments
The new agreement recognises that some emissions – particularly in industrial sectors that are difficult to decarbonise – cannot be completely eliminated by 2040. For this reason, forms of compensation through permanent carbon removals, carried out within national borders.
At the same time, flexibility across different sectors is being increased, allowing Member States to tailor interventions with differentiated tools and more cost-effective methodologies.
ETS2 launch postponed to 2028
One of the most significant changes concerns the postponement of theETS2, the new emissions trading system that will cover the buildings sector and road transport. Its entry into force has been postponed from 2027 to 2028 to allow Member States and markets to adapt to a mechanism that will have a direct impact on consumers and households.
The postponement reflects the desire to avoid excessive pressure on a sector highly sensitive to energy prices, especially in a period of global economic instability.
Biennial review: competitiveness and scientific data under observation
To ensure that the path to 2040 remains realistic and consistent with technological, economic and geopolitical developments, the Commission will carry out a biennial evaluation of progress.
The review will take into account various factors:
- scientific and technological progress;
- level of carbon removals in the EU;
- state of European industrial competitiveness;
- evolution of energy prices and related social impacts.
Should critical issues or new needs emerge, the Commission may propose a modification to the 2040 target or the introduction of additional measures to support the decarbonisation process.
The final word belongs to Parliament and the Council
The political agreement will now need to be formally approved by the European Parliament and national governments. Once ratified, it will enter into force 20 days after publication in the Official Journal of the EU.
This is the most significant update to European climate legislation since the "Fit for 55" package. In addition to setting a clear trajectory towards 2050, the new 2040 target aims to strengthen Europe's position as a global leader in the fight against climate change, while recognizing that ecological transformation must be compatible with the continent's economic competitiveness and social stability.
Reproduction reserved © Copyright La Milano
