Europe’s 2040 Plan: High-Quality Carbon Credits to Support Emissions Goal

The European Commission has introduced a major update to its environmental roadmap, setting a 2040 goal to reduce net greenhouse gas emissions by 90% compared to 1990 levels. The proposal marks a turning point in EU sustainability policy—especially as it opens the door for the use of international carbon credits in hitting that target.

High-resolution satellite image of Europe, photographed from space. AI generated picture.

This new framework builds on the bloc’s current ambition of a 55% cut by 2030 and reflects months of scientific input, public consultation, and institutional review. According to the latest Eurobarometer survey, public backing for environmental action remains strong, offering broad support for the direction the Commission has taken.

‘As European citizens increasingly feel the impact of climate change, they expect Europe to act. Industry and investors look to us to set a predictable direction of travel’, said European Commission President Ursula von der Leyen. ‘Today we show that we stand firmly by our commitment to decarbonise Europe’s economy by 2050. The goal is clear, the journey is pragmatic and realistic.’

A key shift in the proposed legislation lies in how Member States will be allowed to meet their targets. Starting in 2036, up to 3% of the 90% reduction goal can be achieved using international carbon credits, provided they meet high-quality standards and originate from outside the EU. This adds a new mechanism to the EU’s emissions strategy and could unlock demand for tens of millions of additional carbon units each year.

Vice President Teresa Ribera reinforced the dual commitment to environmental and economic strength: ‘We are not choosing between the economy and the green agenda, we are choosing both. Europe reaffirms its commitment to a fair, ambitious, and competitive green transition.’

The broader strategy also includes industrial and financial tools like tax breaks for clean technologies, support for renewable energy infrastructure, and streamlined rules under the Clean Industrial Deal. These initiatives aim to protect Europe’s industrial edge in the face of global competition.

Next, the proposal heads to the European Parliament and the Council for debate and potential adoption. If approved, it will help shape the EU’s post-2030 sustainability framework and inform its updated commitments ahead of COP30 later this year.