EU

Amid the climate breakdown overtaking Europe, which has brought a mounting death toll from repeated heat waves, massive forest fires across much of southern Europe, rivers running dry and drought reducing agricultural production, the EU’s climate ambition is slipping significantly.

While the EU’s emissions continue to fall, it has seen a series of recent weakening of previously-agreed policies, including weakening the 2035 fossil fuel car sale phase-out, proposed slowing of the reductions under the EU ETS scheme, allowing the use of international carbon credits to meet the 2040 GHG emissions target and weakening compliance provisions in the methane regulations. This all undermines the EU’s climate credibility and place a 1.5°C-compatible pathway increasingly out of reach. We therefore maintain the EU’s overall climate action rating as ‘Insufficient’.

In late 2025, the EU agreed to a 2040 climate target of reducing emissions by 90% below 1990 levels. While the headline target represents the least ambitious end of the 90–95% range proposed for domestic reductions by the European Scientific Advisory Board on Climate Change (ESABCC), it has been significantly weakened by allowing 5% of emission reductions to come from international carbon credits between 2036 and 2040, lowering the EU’s effective domestic target to 85%.

The EU’s member states also endorsed a 2035 target of reducing emissions by 66.25–72.5% below 1990 levels (including LULUCF), which is not aligned with limiting warming to 1.5°C but rather closer to 2°C. To achieve a 1.5°C aligned pathway the EU would need to set a target of at least 78% (including LULUCF) or 74% (excluding LULUCF), alongside stronger climate finance commitments.

Since the US-Israel began its war on Iran, the EU has been facing ongoing pressures on energy security and affordability, underlining that the transition remains incomplete and that further delay would carry economic, geopolitical and climate risks. The EU is in a stronger position than during the 2022 energy crisis, with renewable energy deployment accelerating and fossil gas dependence dropping. However, the EU has not yet used this moment to accelerate the shift away from fossil fuels by scaling up renewables, grids, storage, electrification and energy efficiency much faster, while avoiding measures that lock in new fossil fuel infrastructure.

The EU risks responding to the failure of its previous dependence on Russian gas by constructing a new dependence on imported LNG, particularly US LNG, at precisely the time when gas demand should be falling rapidly. New terminals, contracts and gas infrastructure may lock Europe into excessive import capacity and fossil fuel consumption, while crowding out investment in electrification, renewables, grids, storage and efficiency. The strategically credible response is therefore not further diversification among fossil gas suppliers, but a managed and binding phase-out of fossil gas demand.

The post-2030 policy framework will be decisive. The EU now has a major opportunity to set stronger targets and policies to put emissions on a credible pathway to climate neutrality, including through an ambitious 2040 climate target and a robust 2035 NDC. Getting this framework right will be politically challenging, particularly in the current context, but the energy crisis has also reinforced the case for faster structural change. A cleaner, more efficient and more resilient energy system is central to both climate action and long-term energy security.

The EU’s currently quite ambitious climate policy framework is being weakened from many sides widening the gap between the EU’s climate targets and delivery:

• In 2025, under industry pressure, the EU weakened its car CO₂ standards, effectively delaying compliance to 2027 and emitting an additional 51 MtCO₂ from the excess new fossil fuel vehicles sold between 2025 and 2027, roughly equivalent to Denmark’s annual emissions.
• A review of EU ETS is underway in 2026, with some Member States seeking to weaken it using energy cost and competitiveness pressures as arguments. Weakening the system would undermine investment certainty, reward delayed action and weaken the EU’s path to achieving its 2030 and long-term climate goals.
• The EU Methane Regulation is facing pressure from gas interests and some policymakers, who frame import rules and penalties as a threat to energy security. Weakening it would protect fossil gas interests, reduce regulatory certainty, and undermine low-cost methane cuts while failing to address Europe’s real vulnerability: dependence on imported fossil gas.
• The introduction of international credits to reach its 2040 target risks limiting efforts and finances to decarbonise domestically, instead of using carbon removals to reduce emissions on top of 1.5°C aligned mitigation pathways, rather than towards achieving its own targets.

In order to be on a 1.5°C aligned pathway, the EU would have to use its recent shift away from Russian gas as momentum to accelerate the phase-out of fossil gas, rather than replacing one supplier with another. A growing number of new fossil gas infrastructure projects and new contracts to purchase LNG from the US indicates that the EU is on track to lock-in fossil fuel dependency even further at time when demand for gas is in decline.

The political shift away from stronger climate policy comes despite the reality that Europe is heating up twice as fast as the global average, with rapidly rising climate costs: the June heat of 2026 is estimated to have cost the lives of 14,000 Europeans (Weise, 2026). While in the past years, EU weather and climate-related losses reached EUR 162 billion between 2021 and 2023. Without stronger action, losses from climate impacts could escalate sharply, with EU GDP potentially falling by 7% by 2100 and annual damages reaching EUR 83 billion under around 2°C of warming, disproportionately affecting southern Europe.

The CAT finds that the planned policy projections for the EU have worsened, with higher emissions now projected compared to the CAT’s previous assessment. At the same time, current policy projections have slightly improved from the previous assessment. This reflects the ongoing progress being made under existing framework of the European Green Deal but picks up on the weakening of ambition in the EU’s current policy making.

In light of the current geopolitical landscape, the EU has shifted its climate action focus to be centred around competitiveness and energy independence. In 2025, it introduced the Clean Industrial Deal (CID) and the Action Plan for Affordable Energy. The initiatives aim to support industrial transformation and improve energy affordability, with the Action Plan focusing on lowering electricity prices and accelerating permitting for renewables and grid projects. The CID brings together the EU’s industrial and competitiveness agenda around decarbonisation, energy affordability and clean-tech manufacturing.

The EU made significant progress over the past four years under the European Green Deal (EGD). Prior to the EGD, in 2019 the EU’s planned policies were projected to achieve only a 33% emissions reduction by 2030 below 1990 levels. With its current planned policies, it is on track to achieve a 52% reduction, in line with its target. While the EU is heading in the right direction, many gaps and loopholes in these regulations remain and in some cases were missed opportunities to establish fossil fuel phase-out and sector specific targets. To continue improving its climate action, the EU should:

• Update its 2035 and 2040 emission reduction targets to at least 78% and 90% (including LULUCF) below 1990 levels, respectively, without the use of international credits.
• Agree to a full phase-out of fossil fuels across all sectors, with coal phased out altogether by 2030, and fossil gas by 2035 – along with ending new investments in fossil gas infrastructure.
• Establish emission reduction targets for the agriculture sector and shift agriculture subsidies away from emissions-intensive practices towards more sustainable practice, while ensuring farmers have adequate support.
• Set ambitious sectoral electrification targets to send clear signals on the uptake of electro-technologies needed in transport, buildings and industry sectors through the Electrification Action Plan.
• Substantially increase its climate finance contributions, including through returning some revenues from the new Carbon Border Adjustment Mechanism (CBAM) to support decarbonisation in developing countries.

The CAT ratings compare country’s targets and policies to (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which in absence of a better method are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates the EU’s climate targets, policies and finance as “Insufficient”. The “Insufficient” rating indicates that the EU’s climate policies and commitments need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit.

We rate the EU’s NDC target as “Insufficient” compared to its fair share contribution as well as modelled domestic pathways. To improve its overall rating, the EU should strengthen its domestic emissions reduction target for 2030 to at least 62% (excluding LULUCF and international aviation) below 1990, close gaps and remove loopholes in existing policies prolonging fossil fuel use, and significantly increase its support for climate action in developing countries in line with its fair share contribution to climate change mitigation.

The EU’s policies and actions are also rated “Insufficient”. With the full implementation of the EU’s planned policies under the Fit for 55 and REPowerEU initiatives, the EU will come close to meeting its NDC target for 2030. Targets and measures under available member states’ National Energy and Climate Plans are also currently failing to meet the EU’s targets.

The overall lack of ambition of the EU’s 2030 NDC target, as well as any failure to meet it, will mean that it will need to adopt more rapid and deeper emission reduction measures later, in order to achieve a 1.5°C compatible pathway to climate neutrality by mid-century.

Current and planned policies will not be enough for the EU to reach its NDC target. The CAT rates the EU’s climate policies and action as “Insufficient” when compared to modelled domestic pathways. This represents no change from the previous assessment as there have been no major new policy developments.

Since our last assessment (November 2024), the EU has adopted several proposals, including a 2040 climate target of a 90% emissions reduction, and the Clean Industrial Deal. Other developments, such as the proposed Omnibus package on regulatory ‘simplification’ of sustainability reporting, or the amendment to CO₂ standards for cars and vans, introducing three-year averaging for emissions reduction targets, signal adjustments that could reduce the strength of previously-agreed climate ambition.

The upper bound of our policies and action emissions projection range is based on policies reported by member states in 2024, which would result in an emissions reduction of around 48% (excl. LULUCF) below 1990 by 2030. The bottom end of the range is based on policies adopted at the EU level, including the stronger binding renewable energy target (42.5%), which would result in reducing emissions by 50% (excl. LULUCF).

Our updated planned policies projection shows the EU comes close to achieving its NDC if all its proposals under the Fit for 55 and REPowerEU packages are implemented, achieving a 52% emissions reduction from 1990 by 2030. The projection includes an aspirational, higher renewable energy goal (45%) than what is currently binding.

The full policies and action analysis can be found here.

In November 2025, the EU submitted an updated NDC with a target of reducing emissions by at least 55% below 1990 levels by 2030 (incl. LULUCF and international aviation), which is the same as the previous EU NDC from October 2023. The EU introduced a new 2035 target with a reduction of 66.25–72.5%. Excluding LULUCF and international aviation, the 2030 target equates to 53% below 1990 levels, while the 2035 target equates to 61–70% below 1990 levels.

The CAT rates the 2030 target as “Almost Sufficient” when compared to the level of emissions reductions needed within the EU’s borders. The “Almost Sufficient” rating indicates that the EU’s NDC target in 2030 needs substantial improvements to be consistent with limiting warming to 1.5°C. If all countries were to follow EU’s approach, warming would reach over 1.5° C and up to 2°C.

The CAT’s assessment of the EU’s total fair share contribution takes into account its emissions reduction target and its climate finance.

When compared to a fair share emissions allocation, we rate the EU’s 2030 NDC target as “Insufficient”. The “Insufficient” rating indicates that the EU’s NDC target in 2030 needs substantial improvement to be consistent with limiting warming to 1.5°C.

The EU’s target is not consistent with the 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort. Some of these improvements should be made to the domestic emissions target itself, others could come from supporting additional emissions reductions achieved in developing countries in the form of finance. If all countries were to follow the EU’s approach, warming would reach over 2°C and up to 3°C.

We rate the EU’s international public climate finance contributions as “Insufficient”. To improve its rating, the EU needs to ramp up the level of its climate finance contributions and accelerate the phase-out of international fossil finance.

The EU’s climate finance is not sufficient to improve the fair share target rating, and the CAT rates the EU’s overall fair share contribution as “Insufficient”.

The EU’s climate neutrality - or, essentially, net zero GHG emissions – target is ‘Acceptable’ in terms of its architecture, transparency and scope, with a regular review and assessment process.

There is room for improvement in the target’s scope, as the European Climate Law currently does not clearly state that international aviation and maritime transport emissions are included, and it lacks an explanation of why net zero by 2050 constitutes a fair contribution. The 2040 target is less ambitious than anticipated, and brings into question whether the EU will meet the net zero target domestically.

We evaluate the net zero target design as 'Acceptable'.

The full net zero target analysis can be found here.