EU Climate Target 2040: Assessment of the Commission Proposal
EU 2040 Climate Target: Expert Commentary
© Öko-Institut
On 2 July 2025, the European Commission presented its proposal for the EU’s 2040 climate target as well as for the revision of the European Climate Law. The draft foresees a 90 percent reduction in net greenhouse gas emissions compared to 1990 levels. This is a key milestone on the EU’s path to achieving climate neutrality by 2050. At the same time, however, the proposal includes “flexibilities” that, according to analyses by Oeko-Institut, could weaken the impact of real emission reductions.
In two recent publications – a policy brief and a scientific assessment – Oeko-Institut examines key aspects of the Commission’s proposal:
- International carbon credits: The proposal allows for the use of international carbon credits equivalent to three percentage points of 1990 emissions. According to the analysis, this flexibility could result in a 30 percent increase in net emissions in 2040. Gross emissions – those not accounting for CO₂ removals – would then be only 80 percent below 1990 levels.
- Conditions for the use of international credits: Oeko-Institut recommends that Article 6 carbon credits from the Paris Agreement should only be used to go beyond the EU-internal targets, should meet the highest integrity standards, and must be fairly distributed between the EU, partner countries, the UN Adaptation Fund, and a contribution to the atmosphere. Temporary removals – such as those from forestry projects – should not be used to offset fossil fuel emissions.
- Carbon dioxide removals (CDR) in emissions trading: The Commission proposes that only permanent and domestic CO₂ removals should be credited until 2035. Oeko-Institut welcomes this as an essential measure to ensure genuine emission reductions are not undermined.
- Cross-sectoral flexibility: Additional flexibility between sectors, as envisaged by the Commission, could jeopardize the EU’s 2050 climate goal. Oeko-Institut therefore calls for strict limits on such flexibility.
