The European Parliament has formally endorsed a significant climate policy aimed at reducing the European Union's greenhouse gas emissions by 90 percent by 2040, compared to 1990 levels. This legislative move marks a crucial step in the EU's broader strategy to achieve climate neutrality by 2050.

The decision, reached during a session in Strasbourg, awaits final approval from the Council of the European Union, a step widely regarded as a procedural formality. The climate target is part of a comprehensive legislative package developed through extended negotiations between the Parliament and member states.

Compromise to Address Member State Concerns

While the 2040 goal is ambitious, it has faced criticism from some EU countries, notably Poland and the Czech Republic, which argued that the emissions reduction target may be difficult to achieve given their energy infrastructures and economic dependencies. In response, a compromise was reached allowing member states a degree of flexibility. From 2036 onwards, countries will be permitted to purchase emissions certificates from non-EU nations, enabling them to account for up to five percentage points of the required emissions reduction through external offsets. Effectively, this means that EU countries will need to achieve an 85 percent reduction in domestic emissions, with the remainder allowed through certified external measures.

Adjustments to Emissions Trading System

Another key aspect of the agreement involves the delay of the planned expansion of the EU Emissions Trading System (ETS) to include the buildings and transport sectors. Initially scheduled for implementation in 2027, this expansion has now been postponed to 2028. The ETS is a central component of the EU's climate policy, capping total emissions and allowing trading of emissions allowances within covered sectors.

Ongoing Monitoring and Legislative Review

To ensure progress towards the new climate objectives, the European Commission will be required to review the EU's emissions reduction trajectory every two years. These reviews will be based on the latest scientific and technological developments, and the Commission will have the authority to propose adjustments to the climate legislation if necessary. This mechanism is designed to maintain the EU's commitment to its long-term climate goals while providing flexibility to adapt to emerging challenges and innovations.

Path to Climate Neutrality

The recently adopted climate target forms part of the EU's larger climate action framework, which sets out a legally binding path to climate neutrality by 2050. The intermediate target for 2030, aimed at a substantial reduction in emissions, has been positively assessed by researchers, who note that the EU is on track to meet this milestone. However, experts warn that achieving the subsequent targets, particularly the 2040 goal, will demand intensified efforts and further policy innovations.

The adoption of this legislation underscores the EU's leadership in global climate governance and its commitment to fulfilling the objectives of the Paris Agreement. The combination of ambitious targets, periodic reviews, and flexible mechanisms reflects the complexities of balancing climate action with the diverse economic and energy realities of member states.