The EU environment ministers have agreed on a common position for a new intermediate reduction target on the path to climate neutrality. The goal is to lower emissions by 90 percent compared to 1990 levels by the year 2040. The agreement also allows Member States to use high-quality international carbon credits for up to five percent of this target, referencing Article six of the Paris Agreement which has governed bilateral efforts to reduce greenhouse gases since 2024. In addition, the ministers unanimously agreed on the EU’s nationally determined contribution for 2035, which will now be reported to the UN Climate Change Secretariat at the start of the UN Climate Change Conference. The aim is to reduce emissions in the EU by between 66.25 and 72.5 percent by 2035.
Environment Minister Carsten Schneider remarked: "The negotiations were intense, but the outcome is positive. The European Union has shown that it is capable of taking action and can be counted on. On this basis, Europe can play a crucial role at the UN Climate Change Conference in Brazil. The EU has defined a clear path to climate neutrality, sending a powerful signal to the world: Europe is a committed partner in the fight against climate change. We are at the forefront when it comes to investments in clean technology, planning security and innovation. From Germany’s perspective, it is good news that the pace of the climate-neutral transformation of energy, transport and the economy in the EU now matches Germany’s. Germany already has a binding, ambitious climate target for 2040. One has also now been set for the EU. So we are now moving forward together in tandem.”
In addition to the 90 percent target, the following was agreed specifically: Member States can meet up to five percent of the target through the use of high-quality international carbon credits starting in 2036. A pilot phase will be initiated in 2031 to test the new market for international carbon credits. The Commission will also review whether Member States will be allowed to meet a small part of their national climate commitments under EU climate legislation through international credits in the period after 2030.
The new emissions trading system for buildings and transport (ETS II) is scheduled to start in 2028, one year later than originally planned. This will make a longer transition to EU-wide carbon pricing for fossil fuels possible. The Commission is also being asked to consider phasing out free emission allowances more slowly for power plants and large industrial installations. In the event that a Member State is unable to meet its natural sink target, the Commission will propose EU-wide measures as part of a review.
Following the meeting of the Environment Council, the European Parliament will agree on its position regarding the 2040 target. The Council, Parliament and the Commission will then negotiate the legislation in what is known as a trilogue procedure before it is finally adopted.
Further information
International credits: Article six of the Paris Agreement allows emission reduction allowances to be traded across national borders, while ensuring that there is no double counting ("hot air") and that the climate benefits are real and verifiable. This provides a binding basis under international law for countries that want to cooperate on climate action to achieve their NDCs. Climate projects are subject to a number of criteria and must be implemented above and beyond climate measures that are already planned. The EU only wants to use high-quality carbon credits that comply with Article six – in other words, credits that meet clear environmental and social standards and can be implemented in partner countries that already have ambitious climate targets and transparent greenhouse gas accounting. This type of cooperation helps to export technologies and reduce emissions worldwide.