EU environment ministers have again postponed decisions on national emissions targets for 2035 and 2040, just weeks before the UN climate change summit in Belem, Brazil. At the summit, the EU is expected to announce its contribution to environmental goals.
Pressure is mounting to set an ambitious 2035 target to present at COP30, as the EU struggles to resolve its 2040 climate change target domestically.
Both goals will impact European industry through large upfront investments and worker reskilling, and will ultimately send a strong signal to businesses and investors.
The European Commission has proposed a binding target to reduce emissions by 90% by 2040 under EU climate law, putting the EU on track for climate neutrality by 2050. This was discussed by environment ministers and others at Tuesday’s council meeting.
The 2040 climate target will influence the EU’s national climate action plans (2035 targets) under the Paris Agreement, which are scheduled to be presented at COP30. This is seen as a bridge from short-term action to the long-term 2050 net zero target.
“We must leave behind a clear path forward to keep 1.5 degrees Celsius within reach from Belem,” Denmark’s Energy and Climate Minister Lars Aagaard said on Tuesday, speaking on behalf of Denmark’s EU Presidency.
“The next steps are the EU’s Nationally Determined Contributions (NDC) (2035 climate target) and climate law, which we stand ready to continue following strategic discussions between European heads of state and governments,” he added.
EU leaders had previously failed to agree on a 2035 target ahead of the United Nations Framework Convention on Climate Change (UNFCCC) in September, instead proposing a range that would cut CO2 emissions by 66.25% to 72.5% compared to 1990 levels.
EU climate commissioner Wopke Hoekstra said EU leaders will now discuss the “various enablers” and conditions that underpin “ambitious but realistic” targets for 2035 and 2040 at a Council summit on October 23.
However, no decisions are expected to be taken on either goal during the Council summit.
“Leaders will ask that this dialogue (discussions on climate targets for 2035 and 2040) continue and conclude at the next Environment Council meeting,” Hoekstra told reporters in Luxembourg.
An extraordinary meeting of environment ministers will be held on November 4, at which formal proposals on both targets are expected.
“There will be a shortage.”
Under the Paris Agreement, countries are required to submit or update Nationally Determined Contributions (NDCs) every five years.
The EU’s NDCs need to be updated to reflect intermediate targets such as the controversial 2040 climate target, including the 2035 target presented at COP30.
“If you’re looking at what the NDC will look like, it’s safe to assume that we won’t reach our goals,” Hoekstra said, noting that the alliance is still ahead of China’s weaker ambitions and even the United States, which has abandoned its commitment to climate action.
“We’re doing more than our fair share, and that’s the focus of the conversation,” Hoekstra added.
While the EU’s NDCs will be formally adopted by member states, the EU’s 2040 climate targets will be enacted as amendments to European climate law to be passed in 2021.
However, some countries, including Denmark, are pushing for the adoption of both goals at the same time, arguing that this would strengthen the EU’s position to advocate for higher global ambitions at COP30.
However, France, Germany, Hungary, Italy and Slovakia are among the countries resisting the 2040 climate target, demanding lower targets and more flexibility to keep their industries competitive in the transition to zero-carbon technologies.
Key issues being discussed among EU ambassadors include the role of international carbon credits (tradable certificates that authorize the emission of a certain amount of CO2) in meeting the 2040 target.
Negotiators are also discussing how to ensure such credits do not interfere with the EU’s Emissions Trading System (ETS) and whether CO2 storage outside the bloc should be allowed.
In a letter to governments on October 20, Commission President Ursula von der Leyen reiterated her support for the 90% target and suggested that the path to achieving it would include “significant flexibility”.
“Part of the target (3% as proposed by the European Commission) can be achieved with high-quality international credits. Domestic emissions reduction targets can be less than 90%, as long as they are supplemented by similar cost-effective and complete reductions outside the EU,” von der Leyen wrote.
However, many environmental groups have criticized the proposed flexibility, arguing that such carbon offsets undermine the integrity of the target by allowing cuts to be made outside the EU rather than within it.
Decarbonization and competitiveness
The EU’s 2035 and 2040 climate targets aim to accelerate Europe’s path to decarbonisation.
This trajectory is intended to increase short-term investment and compliance costs for energy-intensive industries and increase transitional price pressures on fossil fuel-dependent households. It will also pave the way for long-term, sustainable market opportunities in clean technology, energy efficiency and low-carbon exports.
The allocation of efforts will depend on how governments deploy targeted financing and industry support to protect vulnerable households and maintain competitiveness, a key sticking point among member countries.
“Decarbonization is something we need to do because of climate change, but it’s equally important for our competitiveness and our independence. All three go hand in hand, and we need to make sure that no one goes forward at the expense of the other,” Hoekstra said.
The Climate Change Commissioner acknowledged the “complexity” and “paradoxical” nature of the challenge and said it was an “absolute imperative” to reduce external dependence during the transition period.
More than half of the emissions reductions needed to meet Europe’s 2040 targets depend directly on expanding electricity grids, scaling up renewable generation, electrifying transport and deploying large-scale energy storage, according to a new report from Boston Consulting Group (BCG) and Dansk Industrie.
The study estimates that the region will need around 12 trillion euros in infrastructure investment by 2040 to remain competitive.
“Strategic Opportunity”
After several failed attempts to reach an agreement, the scientists called on EU leaders in an open letter written on October 20 to take an urgent decision on 2040 climate targets.
“The EU must adopt a 2040 climate goal of reducing domestic greenhouse gas emissions by at least 90-95%,” the letter said.
“The key data points supporting this position are clear: the evidence shows that decisive decarbonization is not just a climate necessity, but a strategic economic opportunity,” the scientists wrote, noting the potential hundreds of billions of dollars in savings in fossil fuel imports and the creation of more than 2 million jobs in the clean industry sector.
Global instability, technological advances, rising inequality and policy credibility are the four main risks that could ultimately derail the achievement of the 2040 climate goals, according to a report from think tank Bruegel.
The Brussels-based think tank believes the target is achievable based on previous modeling, but notes such an effort would require a 50% increase in renewable electricity generation, a 75% reduction in fossil fuel use compared to 2019, energy efficiency measures and large-scale electrification across transport, industry and housing.
“A global economy with increasing trade disputes and heightened conflict risks puts the large capital investments needed for the transition at risk, while the cost of clean technologies becomes a key determinant of the economic viability of decarbonization,” Bruegel’s policy report said.
Joseph Delatt, director of energy and climate research and resident researcher at the Montaigne Institute, said Europe could no longer delay deciding on the 2040 target.
“Do we want to be actors, manufacturers of future decarbonization and decarbonization technologies, or just customers? This is a crisis of goals and the means to follow them,” Delatte said.
