EU 2040 Climate Target of a 90% Emissions Cut Is Published in the Official Journal

The European Union's 2040 climate target has become law. Regulation (EU) 2026/667, which amends the European Climate Law to add an intermediate target for 2040, was adopted by the European Parliament and the Council on 11 March 2026 and published in the Official Journal on 18 March. It enters into force on 7 April 2026. The Council gave its final approval on 5 March. The regulation sets a binding target of reducing net greenhouse gas emissions by 90% by 2040 compared with 1990 levels.

The Council also agreed to delay the start of ETS2, the new carbon market for buildings and road transport fuels, by one year to 2028. The EU power sector has already cut emissions sharply, driven by the growth of wind and solar and the decline of coal. For utilities and investors, the 2040 target provides a longer horizon for investment planning. The EU ETS cap declines each year, and under current rules the issuance of new allowances for stationary installations approaches zero around 2039.

The EU used the 2040 target as the basis for its nationally determined contribution under the Paris Agreement, submitted in late 2025, which set a 2035 range of 66.25% to 72.5% below 1990 levels. The target was adopted against a background of concern about competitiveness, high energy prices and the cost of the transition. The regulation gives a role to permanent carbon removals, such as direct air capture with storage and bioenergy with carbon capture, in the EU's climate architecture.

Member states will also need to update national energy and climate plans to reflect the longer horizon. The 2040 target will be implemented through a package of legislation for the period after 2030, which the Commission is expected to propose in the coming years. Natural gas demand in the EU has fallen since 2021 because of high prices, efficiency, mild winters and growth in renewables.