RESPONSE: EU 2040 target approval

On 5 March 2026, the EU Council formally adopted the amended European climate law, introducing a binding, interim, 2040 climate target of a 90% reduction in net greenhouse gas emissions below 1990 levels.

If the EU is to have any chance of reaching net zero greenhouse gas emissions (‘climate neutrality’) by 2050 and ensuring a 1.5°C-compatible trajectory, it needs to ramp up ambition. This means steep emission reductions in the near term, alongside a net 2040 target of at least 90% achieved domestically, and ideally higher - a 95% reduction.

The EU also needs to achieve these reductions within its own borders: the new target allows up to 5% to be met through international carbon credits, which weakens the signal for domestic decarbonisation. The new target risks delaying real, ambitious emission cuts in the EU - and may render the EU net zero target impossible to meet by 2050.

Allowing the use of credits from abroad equivalent to 5% of the EU’s base year 1990 emissions means that rather than making a 90% reduction by 2040 the EU only needs to make an 85% reduction. This means the remaining “residual” emissions in 2040 will be 50% higher than they would otherwise have been. In other words, if the EU were to deploy these international credits, through Article 6 of the Paris Agreement, it would be able to emit 1.5 times more emissions domestically in 2040 than it would without using the credits.

This has at least three important consequences:

• it makes it much more difficult for the EU to get to net zero greenhouse gas emissions by 2050, as it doubles the emission reductions needed between 2040 and 2050;
• it will very likely substantially slow the phase out of fossil fuels within the EU;
• it leaves the EU with very high levels of residual emissions in the 2040s, creating a greater burden for the deployment of carbon dioxide removal technologies, which are both expensive and have major sustainability concerns.

Under the Paris Agreement rules, if the EU were to use Article 6 it should be to go beyond a net 2040 target of at least a 90% domestic reduction, which we would consider 1.5°C aligned.

The EU rightly abandoned the use of international credits in 2021 after they flooded the EU Emissions Trading Scheme (EU ETS) with cheap, low-quality credits, crashing prices, weakening incentives to reduce emissions, and reducing the auctioning revenues. The EU defines both its 2030 target and its 2050 net zero target will be met without offsets. The reintroduction of offsets severely weakens the EU’s domestic ambition by opening the door to accounting loopholes and putting the achievement of the EU’s net zero target at risk.

Despite claims that new Article 6 credits should be “high quality,” the existing safeguards under this article are insufficient to ensure this. Indeed, the scientific evidence is growing that the credits such as those envisaged under Article 6 may be unfixable, and have so far failed to produce any significant emission reductions. Using these credits is a risky and backward step that undermines the principle that climate targets should drive real, domestic emission reductions.

We see big gaps in terms of clarity and ambition around the land use sector and the trajectory after 2030. The EU hasn’t provided separate and transparent land use, land-use change and forestry (LULUCF) targets for 2035 or 2040, which makes it difficult to understand how much of the reductions will come from real emissions cuts versus land sinks. It is also clear that the storage of carbon by Europe’s forests and soils is decreasing due to a combination of factors, including global warming and its impacts, making reliance on this sector increasingly tenuous and potentially dangerous.

In the 2040 climate target impact assessment, EU scenarios suggest it may need to capture hundreds of millions of tonnes of CO₂ from the atmosphere per year and permanently and securely store this by 2040.

Carbon dioxide removal (CDR) is expensive, uncertain, will probably rely on limited geological storage capacity, and will be slow to deploy despite its necessity to meet the Paris Agreement climate goals. As a consequence, CDR should be kept only for essential needs, compensating for residual emissions that cannot be otherwise reduced. It’s crucial that any CDR complements deep emissions cuts rather than replacing them. The EU approach appears to rely on the latter rather than reducing residual emissions to the absolute minimum.

Climate policy that plans to rely on unnecessary large-scale deployment of CDR in the future is a policy that is effectively planning to unnecessarily extend the use of fossil fuels, when the world should be rapidly phasing down - and ultimately getting out of - fossil fuels. CDR, either with bioenergy or with direct air capture, will be needed in the long run to ensure that global average temperature can decline from peak levels and to ensure that the world can get to net zero greenhouse gas emissions as soon as possible in the second half of the century.

Whilst there is no doubt that large scale CDR deployment will be needed, policy should ensure that residual emissions, including from the so-called hard-to-abate sectors are taken as low as feasible so that the actual need for negative CO₂ emissions is reduced to the lowest possible level.

For transparency reasons, and to help ensure that CDR is not over-used, the EU’s future targets should clearly specify what levels of CDR are planned from the land sector and which from technological CDR.

The EU is planning substantial deployment of fossil carbon capture and storage (CCS) infrastructure, to capture CO₂ from industrial plants and even power stations, and transport it for secure geological storage, probably offshore in the North Sea. The wisdom of this is to be questioned given this technology has never taken off properly, has not been deployed at scale, is extremely expensive compared to renewable alternatives in the power sector, and increasingly not viable for many of the so-called hard-to-abate sectors.

There are several risks to the EU’s plans for CCS, the biggest of which is it will not be deployed at the scale envisioned and will therefore leave a hangover of unmitigated emissions. The only real effect of this policy would be to extend the life of fossil fuels rather than phase them out.

• Strengthen the 2040 target: Strengthen the 2040 climate target to at least a 95% net greenhouse gas emission reduction below 1990 levels. It needs to ensure a process to review and strengthen the target over time in line with a 1.5°C-compatible pathway, with the objective of achieving net zero greenhouse gas emissions by 2050.
• Deliver the target through domestic action: Ensure the 2040 target is achieved through domestic emission reductions, allowing international carbon credits only for mitigation beyond an ambitious EU target, not as a substitute for action within the EU.
• Reduce its planned, significant reliance on land sector carbon removal
• Ensure CDR complements — not replaces — emission reductions: Present separate targets for 2035 and 2040 for land use change and forestry and for technological CDR.
• Scale back its approach to fossil CCS and instead, focus on reducing emissions from hard-to-abate sectors.

For more details on the above points in our assessment of the EU's 2035 NDC target as it relates to the 2040 target as well as our blog on what would be a 1.5°C aligned 2035 and 2040 target for the EU.

For more information on how to assess CDR in net zero pledges, read our blog.