EU sets 2040 climate goal: 90% emissions cut

December 12, 2025

The European Union has formally agreed on a new climate objective for 2040, committing to cut net greenhouse gas emissions by 90% compared with 1990 levels as part of its long-term strategy to reach climate neutrality by 2050. 

This landmark deal, reached by representatives from the European Parliament and EU governments, includes important concessions designed to ease implementation pressures. Up to 5 percentage points of the required cuts may be achieved through internationally-verified carbon credits after 2036, giving member states additional flexibility. 

In addition, the launch of the EU’s new carbon trading scheme for buildings and road transport (known as SEQE2) has been delayed from 2027 to 2028, postponing carbon pricing on fuels to reduce short-term economic impacts. 

Key features of the 2040 climate deal

✔ Legally binding emission reduction goal:
EU institutions have codified a commitment to reduce net greenhouse gas emissions by 90% by 2040 compared with 1990, creating a new intermediate milestone en route to climate neutrality by 2050. 

✔ Use of international carbon credits:
From 2036 onward, member states may use high-quality carbon credits from outside the EU to account for up to 5% of their reductions, a flexibility measure added during negotiations. 

✔ Enhanced review and accountability:
The European Commission will evaluate progress every two years, considering updated scientific data, technological advances, and economic competitiveness. This includes the possibility of revising the 2040 goal if warranted. 

✔ Delayed carbon market rollout:
The introduction of the expanded EU emissions trading system (covering heating and transport) has been pushed back, giving industries and consumers more time to adapt. 

Context and implications

This updated climate framework strengthens the EU’s position ahead of global climate talks, notably the COP30 summit, by demonstrating long-term ambition. It forms part of the broader European Green Deal, which also includes a 55% emissions cut by 2030 and a legally binding neutrality target for 2050. 

However, negotiators also incorporated significant carve-outs and flexibility mechanisms in response to concerns from several member states and industry groups about competitiveness, energy costs, and economic resilience. These concessions aim to balance climate ambition with economic realities across the EU. 

The agreement now requires formal endorsement from the European Parliament and the Council before becoming law—procedural steps that are expected to proceed smoothly given the prior political consensus.