EU SETS NEW 2040 CLIMATE TARGET WITH FLEXIBILITY

Current Context: The European Commission proposed legally binding climate legislation calling for a 90% reduction in net greenhouse gas emissions by 2040 (from 1990 levels). The plan includes flexibility provisions to ease the transition for industry.

About the Target

• Core Objective: Achieve 90% emissions cut by 2040 and reach carbon neutrality by 2050.
• Flexibility Mechanism:
• Up to 3% of reductions may be met through high-quality international carbon credits (e.g., forest projects) from 2036 onward.
• Member states can choose which economic sectors contribute most to their targets.
• Rationale: Aims to protect European industries burdened by global competition and high energy costs.
• Critiques:
• Climate teams and NGOs warn it may divert investment from domestic clean energy efforts.
• Brazil, COP30 host, has cautioned against overreliance on offsets flexibility provisions.