Key Facts
• On July 2, 2025, the European Commission proposed a 90% greenhouse gas reduction by 2040.
• The target is based on 1990 emission levels and includes carbon credit use for the first time.
• Developing countries’ carbon credits can account for up to 3% of the target.
• Carbon credits will be introduced gradually starting in 2036.
• The EU aims to achieve net-zero emissions by 2050, the most ambitious global climate goal.
• France, Germany, Italy, Poland, and the Czech Republic opposed the initial plan.
• A new law on carbon credit quality and purchasing rules will be proposed in 2026.
• EU climate advisors oppose carbon credit use, citing risks of reduced industrial investment.
• EU member states must approve the 2040 target.
• A 2035 climate goal, derived from the 2040 target, will be submitted to the UN by mid-September.
Summary
The European Commission has proposed a 90% reduction in greenhouse gas emissions by 2040, compared to 1990 levels, marking a significant step in its climate strategy. For the first time, the EU plans to allow limited use of carbon credits from developing countries, capped at 3% of the target. This decision follows opposition from several member states, including Germany and France. Carbon credits will be phased in starting 2036, with regulations on their quality and purchase to be introduced in 2026. The EU remains committed to achieving net-zero emissions by 2050, the most ambitious climate goal among major economies. However, climate advisors warn that reliance on carbon credits could hinder industrial investment. Member states must approve the 2040 target, and a related 2035 goal will be submitted to the UN by September.
