The European Commission has proposed a binding target to reduce net greenhouse gas emissions by 90% by 2040 (from 1990 levels).

The proposal includes limited use of international carbon credits and flexibilities to ease the transition for industry.

Key Points:

• The EU’s 2040 climate goal aims to reduce net emissions by 90% as a milestone toward achieving full climate neutrality by 2050.
• The proposal allows up to 3% of the target to be met using international carbon credits from 2036, giving industries room to transition gradually.
• The plan is legally binding under EU Climate Law and includes sector-specific flexibilities to balance environmental ambition with economic stability.
• The Commission highlighted that deeper emissions cuts would enhance investor confidence, strengthen energy security, and prepare economies for climate resilience.
• Some EU member states raised concerns over the economic impact, energy costs, and potential competition from foreign industries, especially from China, sparking discussion on tariff protection for local clean-tech sectors.