European Commission Proposes 90% Net GHG Emission Cut by 2040 Under Amended EU Climate Law.
International
On July 2, 2025, the European Commission proposed an amendment to the EU Climate Law, targeting a 90 % reduction in net greenhouse gas (GHG) emissions by 2040 compared to 1990 levels, along with built-in flexibility measures.
- The new proposal enshrines a legally binding 90 % net GHG reduction target for 2040, building on the current 55 % cut by 2030 and the 2050 climate neutrality goal. Called Fit for 90, the amendment to the EU Climate Law aligns with the European Green Deal, providing long-term predictability and investor confidence.
- To ensure political buy-in, the plan includes flexible mechanisms: allowing up to 3 % of the emissions goal to be met using high-quality international carbon credits from 2036, permitting domestic carbon removals (such as carbon capture and storage), and enabling trading across sectors—key tools for a cost-effective, equitable transition.
Main Point :- (i) The pragmatism in the plan reflects political compromises with member states like Germany, Poland, and Hungary. But environmental groups have warned that international offsets could undermine the EU’s internal decarbonisation efforts. Climate Commissioner Wopke Hoekstra emphasizes that stringent standards will maintain robustness.
(ii) The legislation is expected to be finalized in 2026, ahead of the UN COP30 Summit in November. The target, backed by 85 % public support, signals Europe’s ambition to lead global climate dialogues and drive clean investment—while reinforcing energy security and industrial competitiveness.
(iii) Recently, the EU introduced a proposal for “nature credits” aimed at incentivising farmers and forest managers to engage in ecosystem restoration—such as reforestation, wetland rehabilitation, and sustainable land use. This initiative seeks to fill a €37 billion annual funding gap in biodiversity protection by enabling companies and governments to purchase verified credits, similar to carbon offsets but focused on ecosystem health. An expert group is expected to design robust standards and certification processes, with a pilot rollout by 2027.
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