Yesterday evening (9 Dec), representatives from the Parliament’s environment committee and the Danish presidency of the Council reached a provisional agreement on the text that will insert the 2040 emission reduction target into the European Climate Law. The compromise keeps the overall target at 90% and allows for a limited use of high-quality international credits from 2036 onwards.
A press release last night states that the Council presidency and the Parliament had agreed on an amendment to the Climate Law to include a legally binding 2040 climate target.
The final text has not yet been publicly circulated, but according to the press release, it spells out the flexibilities that will help achieve the 2040 target and several key elements that should be reflected in the post-2030 climate framework. These will steer the Commission’s future legislative proposals to enable the EU to achieve the 2040 target, while helping European industry and citizens throughout the transition.
The co-legislators introduce additional safeguards to guide the Commission in preparing the future rules on the use of international credits under the post-2030 climate architecture to ensure the integrity of credits. Where appropriate, the Commission must consider complementing the criteria laid out in the Paris Agreement when establishing the rules for international credits.
The co-legislators also reached a compromise on the scope of potential flexibilities to be examined in the next review of the system. Among other things, the review will cover the potential use by member states of additional high-quality international credits to fulfil up to 5% of their post-2030 targets and efforts.
The deal also confirms the postponement of the EU Emissions trading system for buildings, road transport and small industries (ETS2) by one year, from 2027 to 2028. The delay does not affect the monitoring, reporting and verification requirements under ETS2, which have started as planned in 2025.
Yesterday’s agreement marks the end of negotiations on the 2040 climate target, for which the European Commission presented its draft proposal in July 2025. The Danish Council presidency worked actively to make the member states agree on a compromise position, which they did in early November.
In the Parliament, the 2040 file was assigned to the far-right Patriots group, which wanted to reject it completely. The centre and left parties managed to avoid that but struggled to form a majority to endorse the Commission proposal. Instead, the Parliament opted to wait and see what the member states in the Council decided. Once that was clear, the Parliament moved quickly and decided its position one week later.
After their respective internal compromises in November, the co-legislators were aligned on most points, but the Parliament wanted stricter language on international credits (to allow only ‘high-quality’ units). From the press release, it seems the Council accepted that.
Another point of divergence was whether credits should be explicitly banned from use in the ETS (in which case they can only be used to count towards emission targets in non-ETS sectors). The Parliament’s text contained a recital to this effect (but no mention in the legally operational text). The Council text was silent on this point. We need to await the circulation of the final text to see if the Parliament’s recital is still in.
The negotiators will now take the provisional agreement back to the Parliament and Council for final approval. Theoretically, that can happen already next week with the Parliament plenary session starting on 15 December, and the Environment Council meeting on 16 December (alternatively, the member states can approve the agreement in another Council configuration).
Once the text is formally adopted, it will be translated and published in the European Union’s Official Journal.
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