EU's 2040 Climate Target: A Strategic Roadmap for Industrial Decarbonization
In July 2025, the European Commission advanced a pivotal amendment to the European Climate Law, establishing a climate target for 2040 that aims to significantly reduce the EU’s net greenhouse gas (GHG) emissions. This ambitious goal, set at a reduction of 90% relative to 1990 levels, builds upon the existing 2030 objective of cutting emissions by at least 55%, as outlined in the European Green Deal and the Political Guidelines for 2024-2029.
The 2040 climate target serves as a vital milestone towards achieving climate neutrality by 2050. It reinforces the EU’s commitment to tackle climate change proactively while providing a pragmatic pathway for a decarbonised European economy. The plan emphasizes that aligning with these targets will ensure a healthier and safer future for Europeans, while also preserving investor predictability and avoiding wasteful investments in fossil fuels.
To facilitate this transition, the proposal introduces flexibilities meant to adapt to evolving circumstances. These include a limited role for high-quality international carbon credits during 2030-2040, as well as the use of domestic permanent removals within the EU Emissions Trading System (EU ETS). Such flexibilities are designed to ensure cost-effective achievement of the targets while maintaining a socially just transition.
The development of this 2040 climate strategy has been based on extensive consultations and impact assessments. The process involved active engagement with EU countries, stakeholders, citizens, and the European Scientific Advisory Board on Climate Change. This consultative approach ensures that the policy framework is aligned with economic, security, and geopolitical considerations, fostering competitiveness and resilience.
With this comprehensive strategy, the EU aims to not only meet its climate commitments but also to lead industrial innovation and clean technology markets. By strengthening strategic autonomy, Europe endeavors to become more resilient to global shocks, create stable jobs, and promote a greener, more sustainable future for generations to come.