The European Union has announced it is to set a legally binding climate target of 90% reduction in net greenhouse gas (GHG) emissions for 2040.

It comes following a provisional political agreement between the European Parliament and EU Member States on this headline target and the amendment of the EU Climate Law. The deal also includes the possibility to use high-quality international credits to reach the 90% GHG emissions cut by 2040, compared to 1990 levels, with an adequate contribution of up to 5%.

The European Commission explained the agreed climate target secures a clear and steady trajectory towards a decarbonised European economy by 2050.

“It provides certainty to investors and businesses to drive forward the EU’s clean transition, industrial competitiveness, energy security and independence.,” it added.

President of the European Commission, Ursula von der Leyen, said: “Today, the EU is showing our strong commitment to climate action and the Paris Agreement. One month after COP30, we have turned our words into action – with a legally binding target of 90% emissions reduction by 2040. We have a clear direction of travel towards climate neutrality. And a pragmatic and flexible plan to make the clean transition more competitive.”

The EC added: “This provisional agreement sets out a pragmatic and flexible pathway to 2040 that reflects today’s economic and geopolitical realities. It provides the enabling conditions to deliver the 90% agreed target, including full implementation of the Clean Industrial Deal.”

However the agreement includes a number of  flexibilities:

• The law foresees the possibility to use high-quality international credits to make an ‘adequate contribution’ towards the 2040 target, starting in 2036. This amount can be up to 5% of 1990 EU net GHG emissions, corresponding to a domestic reduction of net GHG emissions by 85% compared to 1990 levels by 2040. This needs to occur in a way that is ambitious and cost-efficient. It must ensure important safeguards that complement those under Article 6.4 of the Paris Agreement and must ensure the consideration of a pilot period for the period 2031-2035.
• The use of domestic permanent removals in the EU Emissions Trading System (EU ETS) to compensate for residual hard-to-abate emissions is included in the agreed climate law.
• There will be greater flexibilities within and across sectors and instruments to help achieve targets in a simple and cost-effective way. Concretely, this could give a Member State the possibility to compensate for shortfalls in one sector without compromising overall progress.

Teresa Ribera, EU executive vice-president for Clean, Just and Competitive Transition commented: “Climate action in the next ten years will be critical to avoid irreversible tipping points in the Earth’s climate system. The EU 2040 climate target responds to the urgency and scale of the challenge and provides protection to people, business and ecosystems from worsening climate impacts.

“It is the essential legally binding framework to give long-term certainty to unlock investment and for governments, regions, local authorities, companies, households and innovators to continue deep just decarbonisation of our economy. The agreed target proves our firm commitment to pursue the full implementation of the Paris Agreement.”

The announcement came on the 10^th anniversary  of the Paris Agreement which pledged to limit global warming to 1.5°C.

Former IPCC lead author, and CEO of Climate Analytics, Bill Hare said: “Ten years ago, the world did something remarkable: it agreed to limit warming to 1.5°C and reach net zero greenhouse gas emissions in the second half of this century. Since then, new policies and targets have cut projected warming to about 2.6°C – roughly a one-degree drop since 2015. That means Paris has already reduced future risks for people and ecosystems: fewer extreme heat events, lower sea-level rise, and less pressure on vulnerable communities than in a 3 – 4°C world.

“The 1.5°C limit and the net zero goal have reshaped policy, finance, litigation and sectoral rules, helping to rewire how states, markets and institutions work. Clean energy investment has now pulled ahead of fossil fuels, with around USD 2 trillion a year flowing into clean technologies – about twice today’s fossil fuel investment.

“Action has slowed in the last four years, even as climate impacts have grown, and we are still a long way from 1.5°C. But the science shows that it is still possible to bring temperatures back well below 1.5°C by 2100 after a brief period of overshoot if governments act now with the highest possible ambition.

“Paris is working: it bent the curve. Now our future depends on the political will to move forward fast enough to finish the job.”