After months of tense negotiations and political stalemate, European environment ministers have finally agreed on a revised climate law setting a 90% cut in greenhouse gas emissions by 2040 — but only after granting member states significant flexibilities to meet the goal.
The compromise, reached early Wednesday morning after an all-night session of talks in Luxembourg, was hailed by the Danish EU Council Presidency as the only viable path forward to end the impasse that had paralysed the bloc's climate agenda for months.
"We've listened and worked with all parties around the table to reach a balanced deal," said EU Climate Commissioner Wopke Hoekstra. "We have agreed to a legally binding headline target of -90%, with an 85% domestic target and up to 5% in international carbon credits. The flexibilities we proposed have been reaffirmed."
Flexibility unlocks long-stalled deal
The deal gives industries access to a larger share of international carbon credits to help offset emissions — a key concession that broke the deadlock. The credits, which allow polluters to finance emission reductions abroad, were capped at 5%, up from the European Commission's original proposal of 3%. A further 5% increase could be considered in a future revision if the EU drifts off its 90% reduction trajectory.
Countries such as Finland, Germany, the Netherlands, Portugal, Slovenia, Spain and Sweden had pushed to keep the 3% limit, warning that greater flexibility risked diluting the EU's credibility. But France and Italy backed the 5% ceiling, while Poland demanded an even higher 10% allowance.
To appease all sides, ministers agreed to start using carbon credits in 2036, as initially proposed by the Commission, with a pilot phase from 2031 to 2035. "The trial period shows openness to using these credits — but it could also backfire if not based on solid science," one EU diplomat told Euronews.
Each carbon credit represents one tonne of CO₂ reduced or removed from the atmosphere. Environmental groups have criticised the mechanism, arguing that it shifts emissions rather than eliminating them, often at the expense of poorer countries.
Despite the compromises, the agreement required several ambitious member states to make what one EU diplomat described as "painful concessions" to secure a qualified majority. Czechia, Hungary, Slovakia and Poland voted against the deal, while Belgium and Bulgaria abstained.
Bridging 2030 and 2050 climate goals
The revised law sets a crucial milestone on the EU's path to climate neutrality by 2050, as outlined in the European Climate Law. The 2040 target is meant to bridge the gap between the bloc's 2030 goals and its mid-century ambitions.
Several governments remain worried that deeper emission cuts could erode industrial competitiveness, especially in energy-intensive sectors such as steel, chemicals and cement. They argue that higher production costs from stricter environmental standards could push investment and jobs outside Europe.
Still, the bloc insists that clean technologies — including electrification, carbon capture and storage, heat pumps, and electric vehicles — will gradually decarbonise heavy industries without undermining economic growth.
Balancing ambition and realism
The final text includes a range of enabling mechanisms designed to reassure member states. These include international carbon credits, carbon removals, and a revision clause to adjust the target if necessary.
A French-proposed "emergency brake" was also added, allowing the EU to review CO₂ removals from land and forests five years after the law takes effect. With forests in decline and carbon-capture technologies still lagging, diplomats said the safeguard was vital to ensure the bloc doesn't rely too heavily on uncertain carbon sinks.
"We must have realistic expectations about what forests and land can deliver," one EU negotiator said. "Other sectors cannot simply absorb their shortfalls."
Another diplomat from a more ambitious member state described the compromise as imperfect but essential: "The risk of having no climate law at all is greater than having one with a revision clause."
Political timing ahead of COP30
The breakthrough comes just days before COP30 in Brazil, where the EU is under pressure to present a clear, united stance on global climate action.
"If we can secure a 90% headline target, we can live with a range for the 2035 goal," said one EU diplomat, referring to the 66–72% emissions range agreed by ministers in September as part of their interim plan.
Competitiveness, defence and geopolitics
While Germany ultimately supported the deal, Environment Minister Carsten Schneider acknowledged the challenge of balancing environmental ambition with economic realities. "We face competition from partners like the United States, which stepped back from international climate leadership, and from China on the industrial front," he said. "But Europe must lead in clean technologies and innovation — that's where our future markets lie."
Czech Environment Minister Petr Hladík called for technological neutrality, allowing countries to choose the most cost-efficient path toward decarbonisation. "In many central and eastern European economies, heavy industry sectors — steel, cement, glass — still lack mature clean technologies," he said.
Meanwhile, Romania's environment minister, Diana-Anda Buzoianu, highlighted how shifting geopolitical realities — including the "bloody war" on Europe's borders — had transformed priorities since the original climate law was adopted in 2021. "Citizens and businesses are now also carrying the burden of rising defence expenditures," she noted.
The European Parliament will now examine the compromise and vote on the 2040 target before entering trilogue negotiations with member states to finalise the law.