EU member states have agreed the Council’s position to amend the European Climate Law to include a binding 2040 target of a 90 percent net reduction in greenhouse gas emissions compared with 1990 levels, as a key milestone toward climate neutrality in 2050. The deal was reached after lengthy overnight negotiations and will guide trilogue talks with the European Parliament.

The compromise allows up to 5 percent of the 2040 reduction to be achieved through high quality international carbon credits from partner countries, effectively lowering the required domestic reduction to about 85 percent, subject to safeguards that the Commission will develop in future legislation. It also confirms a 2035 indicative target range of 66.25 to 72.5 percent emission cuts compared with 1990, which will form the basis of the EU’s updated NDC under the Paris Agreement. Member states further agreed to postpone by one year the start of the new emissions trading system for buildings and road transport (ETS2), from 2027 to 2028, in response to concerns about energy prices and social impacts.