EU proposes 90% emissions reduction target for 2040 – with flexibility to use carbon credits

The European Commission will seek to set a climate target of 90% emissions reduction by 2040 – with “greater flexibilities” to leverage carbon credits and removals.

Based on consultations with a wide array of stakeholders, the Commission decided to introduce for the first time the possibility to use international carbon credits that are “verifiable, certified and additional” for up to 3% of carbon reductions from 2036. “These international credits must come from credible and transformative activities, such as direct air carbon capture and storage (DACCS) and Bioenergy with carbon capture and storage (BioCCS) in partner countries whose climate targets and action align with the Paris Agreement temperature goal,” the Commission says in a Q&A about the new target.

In addition, domestic permanent carbon removals would be usable within the EU Emissions Trading System (ETS) – another new development. “It will give breathing space for hard-to-abate sectors, and it will open new markets for durable carbon dioxide removal technologies,” explained Commissioner Wopke Hoekstra in a press conference on the new target.

Finally, Member States would have flexibility in how they achieve the target, compensating low performance from certain sectors with overachievements in other industries.

The Commission's proposal will now be submitted to the European Parliament and the Council for discussion and adoption.

Offsets risk making ‘a paper tiger’ of EU’s climate ambitions

The new flexibility was immediately slammed by NGOs and environmental think tanks. “The EU’s 2040 climate targets should drive a shift away from fossil fuels, starting with an EU ban on new fossil fuel projects, towards renewables and energy-saving, to cut people’s energy bills, make their homes easier to heat and cool, and clean the air they breathe. Instead the European Commission relies on dodgy accounting and offshore carbon laundering to pretend to hit the lower bound of what its climate scientists advise,” said Greenpeace EU climate campaigner Thomas Gelin. 

For think tank Transport and Environment (T&E), allowing international offsets to be used is still a risky bet, at a time when their efficiency in reducing emissions is still in question.

Federico Terreni, climate policy manager at T&E, added: “The 90% target will provide Europe’s carmakers, airlines, shipping companies and fuel producers the much needed certainty to invest in green technologies. But allowing offsets to meet climate goals is a cop out and risks making a paper tiger out of the European Green Deal. There is no evidence that offsets actually work as intended and it reflects a worrying chipping away of European climate regulations. It would also massively damage the EU’s leadership and credibility as we approach COP30.”

EU Commission: Target is a success in a polarised world

Faced with numerous questions from reporters about the added flexibility, European Commission Executive Vice-President Teresa Ribera said the 90% target remains a key signal to European industry and to the rest of the world that Europe remains committed to decarbonisation, even at a time of growing polarisation.

“Yes, 85% of European citizens state their fears on climate being a big threat. But at the very same time, we also witness people that challenge the meteorological services, that make jokes about climate, that feed climate scepticism, desperation, polarisation, and ask for delay. 

“The world of the beginning of 2024, was not the world of today. We still had a huge majority, including one of the biggest countries, supporting multilateralism. This is not the case anymore.

“In that given context, what has been asked by some is to provide a certain amount of flexibility to ensure a safety net. But the commitment remains. So for all those (...) thinking that the world is going to remain and that the market is going to solve everything, even if there is no political involvement – the response coming from Europe is very clear. We are going to bet and to invest in our sustainable development. So I think that very honestly, it is quite a success,” she explained.