EU Sets Legally Binding 2040 Climate Target

On 10th December 2025, the European Union agreed on a legally binding target to cut greenhouse gas emissions by 90% from 1990 levels by 2040, allowing 5% of the reductions to be met through foreign carbon credits, after negotiators from EU countries and the European Parliament reached a political compromise.

Key Points

New 2040 Target: Requires an overall 90% emissions cut from 1990 levels, with 85% to be achieved domestically and the remaining 5% via international carbon credits.
Carbon Credits for Developing Nations: Europe will purchase credits to finance emissions cuts in developing countries, partially offsetting its own reduction obligations.
Global Context: The EU target exceeds climate pledges by most major economies, including China, but falls short of recommendations from EU climate science advisers and Brussels’ original proposal.
Reason for Compromise: Poland, Slovakia, and Hungary cited industrial costs and competition from China and the U.S., while the Netherlands, Spain, and Sweden pushed for stronger action due to extreme weather and green tech competition.
Future Flexibility: The EU agreed to consider using an additional 5% in international carbon credits post-2040, potentially further reducing required domestic cuts.
Net-Zero Pathway: The goal keeps the EU aligned with its 2050 net-zero commitment after months of difficult negotiations.
Carbon Pricing Delay: To secure support, the EU postponed the launch of the new carbon price on fuels by one year, to 2028.