The European Commission has proposed a major update to the EU Climate Law, setting a new target of a 90% reduction in net greenhouse gas emissions by 2040, relative to 1990 levels. The draft emphasizes a technology-neutral approach to decarbonisation, recognizing the need for a wide range of energy solutions, renewables, nuclear, carbon capture and storage (CCS), carbon capture and utilization (CCU), and carbon removals, to transform the EU energy system.
From 2036, the proposal allows Member States to use international carbon credits, enabling them to offset emissions by investing in climate projects in developing countries. It also introduces incentives for permanent carbon removals within the EU, particularly to address emissions from hard-to-decarbonize sectors. The initiative builds on existing commitments for 2030 and outlines a framework for future climate and energy legislation, including measures like the Clean Industrial Deal State Aid Framework and a streamlined Carbon Border Adjustment Mechanism.