European Union adopts binding ninety percent emissions reduction target for 2040 to anchor green transition

The European Union formally adopts a 90% greenhouse gas reduction target for 2040, introducing carbon credit flexibilities and delaying new transport taxes.

By: AXL Media

Published: Mar 6, 2026, 9:01 AM EST

Source: The information in this article was sourced from Anadolu Agency

Enshrining the 2040 climate milestone

The European Council reached a final legislative milestone on Thursday by formally endorsing a 90 percent reduction target for net greenhouse gas emissions by 2040, measured against 1990 levels. This binding objective serves as a critical bridge between the bloc’s 2030 goal of a 55 percent reduction and its ultimate commitment to achieving full climate neutrality by 2050. The adoption follows months of intense negotiations between the European Parliament and member states, resulting in a hard fought compromise that balances environmental ambition with the economic realities of a region currently impacted by energy price volatility and industrial competition.

International carbon credits and domestic limits

A pivotal and controversial element of the new law is the allowance of high quality international carbon credits to fulfill a portion of the 2040 target. Starting in 2036, member states may use these credits to account for up to five percent of the EU's total 1990 net emissions. This flexibility means that while the headline target remains 90 percent, at least 85 percent of the total reductions must be achieved through domestic action within the European Union. These credits must be sourced from verified emission reduction projects in partner countries and must strictly adhere to the sustainability and transparency criteria established under the Paris Agreement.

Strategic delays and industrial safeguards

To secure the support of member states concerned about industrial competitiveness and social fairness, the amended law includes a one year postponement for the launch of the EU’s new emissions trading system, known as ETS2. Originally scheduled for 2027, the system—which will apply carbon pricing to fuel used in road transport and building heating—is now set to begin in 2028. This delay was specifically designed to mitigate immediate financial pressure on households and businesses. Additionally, the European Commission is now required to conduct a formal review of the 2040 target every two years, assessing the impact of the transition on energy prices, technological progress, and the global competitiveness of European industry.