EU’s 2040 Interim Climate Target and Amendment to the European Climate Law Formally Adopted

On 5 March 2026, the Council of the European Union formally adopted a binding interim climate target for 2040, which foresees a 90% reduction in net greenhouse gas (GHG) emissions compared to 1990 levels, as well as the corresponding amendment to the European Climate Law.

The new target is expected to further strengthen the EU’s pathway towards achieving climate neutrality by 2050 across all sectors of the EU economy.

Under the EU’s new 2040 target, the use of high-quality international carbon credits will be permitted from 2036 onwards. However, the use of such credits will be limited to a maximum of 5% of the EU’s 1990 net emissions. This provision aims to ensure that the 2040 target is achieved in a manner that is both ambitious and cost-effective.

In this context, at least 85% of emission reductions must be achieved within the European Union. The credits to be used must be based on credible greenhouse gas reduction activities carried out in partner countries and must be consistent with the Paris Agreement.

The adoption of the new regulation marks the final step in the legislative process. The amendment to the European Climate Law will enter into force 20 days after its publication in the Official Journal of the European Union and will apply directly in all EU Member States.

Meanwhile, the European Commission is expected to present the necessary policy and legislative proposals to implement the EU’s binding 2040 climate target in the coming period.

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