Delayed 2040 climate targets finally announced by the European Commission

The European Commission has finally set out its much-delayed proposals for a 2040 climate commitment. Set to become a key milestone on the bloc’s journey to becoming climate neutral by 2050, it suggests a 90% reduction in emissions relative to 1990 levels by 2040[i]. Crucially, the EU is presently on track to meet its 2030 target of a 55% reduction, and the new proposal aims to build on this legally binding goal.

However, the 2040 climate target has faced scepticism from some member states, including France, Germany, Italy, Poland and the Czech Republic, fearful over the impact such drastic cuts will have on domestic industries. To appease them, and to help soften the impact of emissions reductions on home markets, the EU has proposed flexibility by allowing the purchase of carbon credits from international projects.

The proposal states that the European Union can purchase carbon credits from other countries through official international carbon market mechanisms, these should cover no more than 3% of the 2040 target. This is a notable step change from previous targets which were based solely on domestic emissions cuts, yet the Commission suggests credits will play a limited role and can only be applied from 2036 onwards.

The EU's climate science advisers had warned against counting credits towards the 2040 target, and said spending money on foreign carbon credits would divert investments from local industries”[ii]. However some nations, including Italy and the Czech Republic, had wanted credits to cover a greater proportion of the 2040 target. There are concerns that implementing a strict target now would send the wrong message to nations looking to grow their industrial production as a means of enhancing economic resilience.

Following the proposals, Commission President Ursula von der Leyen said: “As European citizens increasingly feel the impact of climate change, they expect Europe to act. Industry and investors look to us to set a predictable direction of travel.

She added that: “Today we show that we stand firmly by our commitment to decarbonise the European economy by 2050. The goal is clear, the journey is pragmatic and realistic.”

EU climate commissioner Wopke Hoestra added: “We are staying the course on the clean transition. We know why we’re doing it – for economic, security and geopolitical reasons.”

However, the plans have faced criticism from climate groups who argue that the proposals could hamper efforts for decarbonisation across Europe, with nations choosing to offset via carbon credits instead.

What happens next?

The proposal must now go through negotiations ahead of a vote expected to be tabled in September. If passed the EU will propose legislation to set out the rules for carbon credit purchases in 2026.

References

[i] European Commission calls for 90% carbon reduction by 2040

[ii] EU proposes a 90% cut in greenhouse gases by 2040

‍