Emissions: The Commission offers more flexibility but more ambitious targets.

Note by Nicolò Geraci On the path to net-zero greenhouse gas emissions by 2050, the European Commission has proposed a 90% reduction in emissions by 2040 compared to 1990 levels. The proposal introduces greater flexibility for Member States, the details of which will only be established through subsequent legislative action. Nonetheless, the decarbonization path would become more ambitious. If the current commitment to a 55% reduction in net emissions by 2030 – still compared to 1990 – were met, reaching the 2040 target along a linear trajectory would require a reduction of 166 million tonnes of CO₂ equivalent each year. By comparison, along the previous linear trajectory between 2030 and 2050, an annual reduction of 107 million would be required. Given the less favorable political context for the green agenda, the Commission's proposal may face strong objections. On July 2, the European Commission presented an amendment to the European Climate Law (Regulation 2021/1119) to introduce the target, already set in a February 2024 Recommendation, of reducing the EU's net greenhouse gas emissions by 90% by 2040 compared to 1990 levels. The Climate Law is the regulatory framework for achieving climate neutrality, i.e., zero net greenhouse gas emissions within the Union, by 2050. When it was approved, the Law already set an intermediate target of reducing net emissions by 55% by 2030, again compared to 1990. To this end, the "Fit for 55" legislative package proposed by the Commission was adopted in 2023. The Law itself provides for the adoption of a 2040 target to define the best emissions reduction trajectory, assessed on the basis of the latest scientific evidence, available technology, and the preservation of the EU's competitiveness. It is in this context that an intermediate target of 90% by 2040 is now proposed.

Progress so far: The EU has significantly reduced emissions in recent decades. By 2023, net greenhouse gas emissions – expressed in terms of their CO₂ equivalent – in the 27 EU countries had fallen by 37% compared to 1990 (Fig. 1, blue line), despite real GDP having grown by 68% over the same period. In per capita terms, the result is even better: between 1990 and 2023, net emissions decreased by 41%, from 11.3 tonnes per year to 6.7. Starting from 2021, when the European Climate Law was adopted, a linear reduction in emissions towards the 55% target by 2030 – again compared to 1990 – would require an annual reduction in emissions of 132.3 million tonnes (Fig. 1, yellow series). So far, this trajectory has been more than maintained, with an average annual decline of 167.5 million tonnes in 2022-23, as confirmed by the Commission's positive assessment. Beyond 2030, achieving climate neutrality by 2050 would require a more gradual decline (106.6 million tonnes per year) (Fig. 1, yellow dotted line).

The new interim target for 2040 and the proposed new margins of flexibility What does the new interim target of a 90% reduction (against 1990 levels) by 2040 entail? If the 2030 target is met, reaching the new interim target would imply a much more intense annual reduction in emissions than previously envisaged, with a reduction of 166 million tonnes between 2030 and 2040 (Fig. 1, red dotted line), compared to the 106.6 million previously cited. At the same pace in subsequent years, climate neutrality would be achieved as early as 2043. Despite the retreat of the most climate-sensitive parties in the 2024 European elections, and thus a more uncertain political consensus, the Commission appears intent on advancing more rapidly towards zero emissions. To make this accelerated decarbonization more acceptable, the Commission's proposal outlines new flexibility tools, the details of which will be defined by subsequent legislative interventions. Among the most important points are:

• allow the permanent removal (i.e. direct capture and storage) of greenhouse gases emitted in the Union to be monetised within the European Emission Trading System;

• expand the possibility of offsetting lower emission reductions in some sectors with further reductions in other sectors;

• make it possible, starting in 2036, to include international carbon credits from projects financed by Member States to reduce emissions outside the Union in the calculation for achieving the 2040 target. This would be up to a maximum of 3% of European emissions in 1990, provided that the projects meet stringent standards (in accordance with Article 6 of the Paris Agreement, which established these credits). The extent of these margins of flexibility is still uncertain, further increasing the risk that the increased decarbonization ambition implicit in the new interim target will encounter serious obstacles. To enter into force, the proposal will need to be approved by the European Parliament and the Council of the European Union (composed, in this case, of the Environment Ministers of all Member States and which takes decisions by qualified majority), in line with the ordinary legislative procedure. European Climate Commissioner Hoekstra clarified that negotiations will only begin at a later stage to determine how to distribute the effort required to reach the European 90% target among member states. Already, countries contribute differently to emissions reductions, given their different starting levels and per capita GDP. If approved, the new target will become part of the official position the European Union will present at the United Nations COP 30 meeting next November.