EU Targets 90% Emissions Cut by 2040 as 2030 Goals Near

The European Union is shifting more and more towards the climate targets, and new data indicates that it is set to meet a 54% greenhouse emissions cut by 2030. This places the EU just shy of its 55% target. In line with this beat, the European Commission will also make more ambitious climate objective to reduce emissions by 90% by 2040. The official announcement would be on 2 July 2025, further placing the EU in position to cement its leadership in global climate leadership.

The action follows as new climate action plans were recently handed in by the EU member states. The European Commission's view is that the bloc is for the most part on track towards achieving the 2030 target on emissions, though it hinges on member states upholding their own commitments. This is significant especially considering the bloc is also facing increased political pressure and shifting priorities, such as increased defence expenditure.

Even as there has been a general positive trend, the Commission has seen many areas where progress is scant. Some of these are energy poverty, very low levels of energy efficiency, and poorly contributed land use to carbon capture. One of the EU's primary objectives is capturing 310 megatonnes of CO₂ every year from land and forests by the end of the current decade—a goal yet to be achieved.

The recent progress of the EU follows earlier warnings of falling behind on climate goals. Late last year in 2023, the bloc had fallen behind schedule, according to comprehensive reports. However, restorative action has already been taken, most significantly the policy of taking on a 2024 rule that obliges 44 oil and gas producers to deposit 50 million tonnes every year of CO₂ in geological storage by 2030. The measure is seen as a key component of the EU's general decarbonisation policy, making fossil fuel producers themselves responsible for their emissions.

Increased support is being given to the future 2040 goal. More than 150 European companies and investment organizations, including giants like Allianz and Unilever, have come out in public to endorse the proposed goal of cutting emissions. They feel that an explicit goal will provide investors with clarity, trigger the development of green sectors, and align national policy with international climate objectives. Companies are confident that a clear policy structure will allow investment in renewable assets and support industrial innovation.

Other than the target of emissions itself, the 2040 plan will also include a stipulation for partial use of carbon credits. The latter would be advantageous to EU member countries in that it will allow them to count reductions from foreign certified emissions-reduction projects against their country's targets. This could take the form of investments in cleaner energy sources like solar and wind power farms in developing nations. The strategy has, however, been contentious. Although some consider it a good means of realizing net cuts, others are skeptical of its efficacy and reliability in the wake of previous performance of such projects.

In order to meet these concerns, the Commission can limit the utilization of carbon offsets to 3% of the overall target of reduced emissions. Such credits should come under strict certification regulations in order to ensure accountability and transparency. Germany has already indicated assent to this provision, reflecting a desire by powerful member states to find a balance between climate ambition and flexibility.

The Commission's imminent proposal also is a reflection of broader regulatory transformation. New legislation such as the Corporate Sustainability Reporting Directive (CSRD) is ensuring the continued currency of environmental, social, and governance (ESG) disclosure by businesses in Europe. Once these regulations come into force, they will have the ability to continue shaping company activity on climate and catalysing greater compliance with decarbonisation targets.

With the July deadline looming, the EU is set to drive the world climate agenda. In spite of continued economic and political stress, the bloc is pressing ahead with tougher policies for long-term emission cuts. Coordination of tougher targets, sectoral aid, and regulation is now giving direction to the EU's climate trajectory.

Should it be implemented, the 90% reduction goal of greenhouse emissions will be a flagship element of the post-2030 climate plan of the EU. It will also serve to solidify its commitments to the Paris Agreement and support international action in limiting temperature increase to 1.5°C. The EU plan marks an era of both recognition of the urgency of the climate emergency and an escalation of more dynamic and methodical climate regulation.

Success will then rest on continued long-term cooperation among member states, effective implementation of existing policies, and sustained public and private sector action. With greater influence, clearer goals, and increasing momentum, the EU's 2040 vision could chart the course of climate policy for all Europe and the world.

Source: KnowESG | Original Reporting by The Energy Mix