The European Parliament has approved a landmark commitment for the EU to reduce greenhouse gas emissions by 90% by 2040 compared to 1990 levels. This target is now the bloc’s central climate milestone on the road to achieving full climate neutrality by 2050. While the agreement permits a small share of reductions, up to 5%, to be met using international carbon credits, at least 85% must come from direct domestic emissions cuts.

The decision follows months of political negotiation shaped by rising energy costs, industrial competition concerns, and shifting geopolitical priorities. Many member states argued that the EU needed flexibility to protect manufacturing competitiveness and avoid driving production outside the region. Others pushed for stronger domestic-only reductions, warning that offsets could dilute real climate action. Ultimately, the final agreement strikes a middle ground: maintaining ambition while allowing limited access to credible foreign credits.

The vote was also a strategic move ahead of COP30, ensuring the EU arrives with a unified long-term climate position. However, the target remains less stringent than what scientific advisory bodies recommended, as they advocated for a full 90% domestic cut to align with a 1.5°C climate pathway.

Allowing carbon credits adds a new layer of complexity. Concerns remain about the quality, verification, and permanence of offsets, prompting the European Commission to commit to strict oversight under emerging EU-wide certification frameworks. These rules are expected to align with the EU Emissions Trading System and new standards for carbon removal.

The next challenge lies in translating the 2040 target into sector-specific pathways for power, heavy industry, transport, buildings, and agriculture. This will require clarity on investment incentives, carbon pricing trajectories, and the support available to help industries’ transition without compromising economic stability.

For businesses, the 90% target provides long-term direction but also signals rising pressure to decarbonize supply chains, accelerate clean energy adoption, and prepare for tighter reporting and compliance requirements. For policymakers, the task now is to balance ambition with economic resilience while ensuring Europe maintains its global climate leadership.

Source :

https://esgnews.com/eu-backs-90-percent-emissions-cut-by-2040-with-limited-use-of-carbon-credits/