European Union climate ministers forged a hard-won agreement on a landmark 2040 emissions target, but the deal came at the cost of significant concessions that have exposed deep fractures among member states. After more than 18 hours of intense negotiations in Brussels, the bloc settled on a goal to cut greenhouse gas emissions by 90% from 1990 levels. The agreement was reached just days before the crucial COP30 climate summit in Brazil, allowing the EU to present a unified, albeit weakened, position on the world stage.
The deal, however, is a reflection of the growing tensions between the EU’s ambitious climate agenda and the pressing economic realities facing its members. To secure the agreement, ministers acquiesced to a series of compromises, most notably allowing countries to use foreign carbon credits to offset up to 5% of their reduction targets, effectively lowering the domestic emissions cut to around 85%. This and other new flexibilities have been met with sharp criticism from environmental advocates and have raised questions about the bloc’s credibility as a global leader in the fight against climate change.
Details of the hard-fought compromise
The core of the agreement is the commitment to a 90% net reduction in greenhouse gas emissions by 2040, a crucial step toward the EU’s legally binding goal of achieving climate neutrality by 2050. This target, originally proposed by the European Commission, is intended to guide the next phase of the continent’s green transition, impacting everything from industrial processes to daily life. The deal also formalized the EU’s Nationally Determined Contribution (NDC) for 2035 under the Paris Agreement, setting a reduction target of between 66.25% and 72.5%.
However, the final agreement contains several significant concessions designed to win over skeptical nations. The most contentious of these is the provision allowing member states to use international carbon credits for up to 5% of the 2040 target starting in 2036. Critics argue this outsources the EU’s climate responsibilities rather than fostering domestic innovation and decarbonization. In another major compromise, the launch of a new EU carbon market for road transport and heating, known as ETS2, has been delayed by one year to 2028, a key demand from countries like Poland concerned about rising fuel prices.
A deeply divided union
The marathon negotiations highlighted the stark divisions within the 27-member bloc. A coalition of Central and Eastern European countries, including Poland, Hungary, and Slovakia, voted against the 90% target, arguing that its stringent requirements would harm their industries and economies. These nations have consistently raised concerns about the financial burden of the green transition and the potential for competitive disadvantages against global rivals. Polish Deputy Climate Minister Krzysztof Bolesta emphasized the need to “save both” the economy and the climate.
Varying national interests
The fault lines were not purely east-west. France, a major proponent of nuclear power, pushed for the 5% carbon credit flexibility and sought guarantees that its nuclear sector would not be disadvantaged. Italy and the Czech Republic also advocated for greater flexibility, with some initially demanding a 10% carbon credit allowance. In contrast, a group of more climate-ambitious nations, including Spain, the Netherlands, and Nordic countries, resisted efforts to dilute the target further. Spain’s Environment Minister, Sara Aagesen, cautioned that the EU’s international leadership was “at risk” if it failed to present a strong commitment.
Economic anxieties and industrial pushback
The pushback against the 90% target is rooted in widespread economic anxiety. European businesses and industry groups have expressed growing concerns about being overburdened by excessive regulatory requirements under the EU Green Deal. Eurochambres, a leading business association, warned that the Commission’s strategy has led to “significant competitive disadvantages” and is accelerating the deindustrialization of Europe. They argue that while the vision for climate neutrality is supported, the current approach weakens the economy, with the threat of recession looming for major European economies.
These concerns are amplified by the ongoing energy crisis, industrial competition from China, and the immense cost of transitioning away from fossil fuels. The debate over the 2040 target reflects a broader political shift, where the consensus on climate action that existed five years ago has fractured amid rising energy costs and concerns about global competitiveness. The need to balance climate action with industrial and economic independence has become a central theme, as articulated by EU Climate Chief Wopke Hoekstra, who stated the agreement is “pragmatic” and marries climate action with competitiveness.
Implications for COP30 and global leadership
The timing of the agreement was critical, as the EU sought to avoid arriving at the COP30 summit in Belém, Brazil, empty-handed. European Commission President Ursula von der Leyen hailed the deal as “good news,” providing a clear mandate to assert the bloc’s leadership in global climate negotiations. The EU’s ability to present a common position, however compromised, is seen as vital for encouraging other major economies to increase their own climate ambitions.
Criticism of weakened ambitions
Despite the relief of reaching a deal, environmental organizations have been scathing in their assessment. Greenpeace derided the use of foreign carbon credits as “offshore carbon laundering,” arguing it effectively lowers the EU’s domestic commitment. They contend that the deal allows the bloc to outsource its obligations rather than making the necessary investments in green technologies at home. The EU’s own independent climate science advisers had cautioned against relying on foreign credits, stating that such a move could divert investments away from European industries. This watered-down target, critics argue, undermines the EU’s claim to climate leadership and sets a poor precedent for other nations ahead of COP30.
