EU 2040 emissions reduction target holds its line on climate, but climate groups warn that loopholes threaten its integrity

Announcing its new proposal on 2 July, the EC reported that the EU is already ‘well on track’ to meet its existing legally binding goal of reducing net GHG emissions by at least 55% by 2030. It says the new proposal sets out a ‘more pragmatic and flexible way to reach the 2040 emissions reduction target, with a view towards a decarbonised European economy by 2050’.

However, the new proposal includes ‘flexibilities’ that would enable the EU to ‘reach the 2040 goal in a different way than has been done in the past’. The EC wants to allow member states to purchase international carbon credits to offset emissions from 2036 – although it adds that these should play only ‘a limited role’, covering no more than 3% of the 2040 target. It also wants to allow industries to be able to trade credits more freely under the EU Emissions Trading System (EU ETS) and proposes ‘greater flexibilities across sectors to help achieve targets in a cost-effective and socially fair way’.

Climate groups were quick to oppose the flexibilities outlined in the proposal.

Mathieu Mal, Policy Officer for Agriculture and Climate at the European Environmental Bureau (EEB), Europe’s largest network of environmental NGOs, said: ‘The climate crisis doesn’t wait, and it certainly doesn’t care for accounting tricks. These so-called “flexibilities” are just loopholes to delay real action.’

The EEB says that the inclusion of international carbon credits in the plan, despite calls from the EC’s own scientific advisers for a domestic-only climate target, amounts ‘to outsourcing EU responsibility, with a high risk of fraud and unverifiable emissions cuts’. The EEB also suggests that allowing member states to shift their efforts between sectors could cause ‘further delays in lagging areas like agriculture or transport’. In addition, it notes: ‘The 90% reduction is expressed only as a net figure – failing to distinguish between actual emissions cuts and carbon removals, which are not equivalent.’

As a result, the EEB is calling for ‘stronger, clearer targets’, including three separate targets for gross emissions cuts, industrial removals and nature-based sequestration, to ensure ‘clarity and transparency’. It also says offsets should not be allowed; rather, climate neutrality should be ‘achieved through domestic action’. Lastly, it is calling for ‘a just and nature-compatible policy package, to ensure fairness across sectors and align climate efforts with social and environmental priorities’.

Meanwhile, Federico Terreni, Climate Policy Manager at Transport & Environment (T&E), warned: ‘Allowing offsets to meet climate goals is a cop-out, and risks making a paper tiger out of the European Green Deal. There is no evidence that offsets actually work as intended and it reflects a worrying chipping away of European climate regulations. It would also massively damage the EU’s leadership and credibility as we approach COP30.’

Gareth Redmond-King, Head of International Programme at the Energy and Climate Intelligence Unit (ECIU), concurred, adding: ‘Developing nations on the frontline of worsening climate change impacts will fear for COP30’s outcome if a big beast like the EU is stopping short of the ambition expected of them – even by their own climate advisers.’

Next steps

According to the EC, its new proposal setting a 2040 climate target aligns with the EU Competitiveness Compass, Clean Industrial Deal and Affordable Energy Action Plan. It ‘takes fully into account the current economic, security and geopolitical landscape and gives investors and businesses the predictability and stability they need in the EU’s clean energy transition’. Furthermore, the EC adds: ‘By staying the course on decarbonisation, the EU will drive investment in innovation, create more jobs, growth, increase our resilience to impacts of climate change and become more energy independent.’

Commission President Ursula von der Leyen commented: ‘Today we show that we stand firmly by our commitment to decarbonise the European economy by 2050. The goal is clear, the journey is pragmatic and realistic.’

The proposal will now be submitted to the European Parliament and the Council for discussion and adoption under the ordinary legislative procedure. A future agreed EU climate target will also serve as a benchmark for the post-2030 EU policy framework that will be developed thereafter, notes the EC.