European Parliament sets a new, intermediate and binding 2040 EU climate target

As confirmed in the Competitiveness Compass, Europe has set out an ambitious framework to become a carbon-neutral economy by 2050. The EU has set its climate targets for 2030 and 2050 in Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality (the European Climate Law). The European Climate Law required an intermediate 2040 climate target to set the pace for EU-wide reductions of net greenhouse gas (GHG) emissions.

On 6 February 2024, the Commission published a Communication on the Union’s climate target for 2040, setting a path from the already-agreed intermediate 2030 target to climate neutrality by 2050. Taking into account the scientific advice by the European Scientific Advisory Board on Climate Change and based on a detailed impact assessment and report on the carbon budget, the Communication presented a 90% net GHG emission reduction compared to 1990 levels as the recommended target for 2040. On 13 November 2025, the European Parliament adopted its position on the Commission’s proposal for an amendment to the EU Climate Law, setting a new, intermediate and binding 2040 EU climate target of reducing the net GHG emissions by 90% compared to 1990 levels.

According to the explanatory memorandum of the proposal, the 90% target puts the EU on the pathway which provides the greatest overall benefits in terms of competitiveness, resilience, independence, autonomy, a just transition and ensuring that the EU meets its commitments under the Paris Agreement. The explanatory memorandum of the proposal also states that setting a 2040 target will provide investors and EU businesses with predictability and a clear indication of the transition pathway needed to drive business decisions and unlock private investment.

Members of the European Parliament believe the green transition and improving EU competitiveness go hand in hand. They therefore agree with the Commission’s proposal to introduce new flexibilities in how these climate targets can be met. Within the framework of this flexibility, from 2036, up to five percentage points of net emissions reductions could come from high-quality international carbon credits from partner countries, but the European Parliament wants assurances that this will be subject to robust safeguards. The Commission had proposed a cap of up to three percentage points.

Currently, the proposal is awaiting the European Parliament’s position and was referred back to the committee responsible for interinstitutional negotiations. Based on the European Parliament’s press release, the European Parliament is ready to start negotiations with Member States on the final shape of the law.