Tuesday, July 2, 2025 – Brussels, Belgium  

Main asks: 

• The EU should stick to an ambitious target to cut net emissions by at least 90% by 2040. 

• International credits should not water down the EU’s domestic climate targets but serve to increase global climate ambition.  

• Further transparency is needed, and separate targets should be created for  

1. gross emissions reductions,  
2. LULUCF (Land Use, Land-Use Change and Forestry),  
3. permanent carbon removals. 

• Both the 2035 and 2040 targets should be consistent with a pathway towards 90% reductions and climate neutrality by 2050. 

Today, the European Commission published a legislative proposal to amend the European Climate Law. The proposal includes a headline 90% net emissions reduction target by 2040, in line with the less ambitious end of scientific recommendations and the Commission’s Impact Assessment from February 2024.  

However, it opens the possibility of using international credits and other loopholes to meet this domestic target. This risks undermining the core intent of the Climate Law, which is to drive domestic climate action towards making Europe the world’s first climate neutral continent. Moreover, it signals a slipping EU leadership to the global climate community at a time when leadership is needed more than ever: Europe is watering down its own previously stated ambitions and plans to outsource some of its efforts.  

At the same time, the Climate Law should provide clarity and transparency by including additional, separate, and limited targets for LULUCF (Land Use, Land-Use Change and Forestry) and for permanent carbon removals towards the achievement of the 2040 target. This approach is supported by over 100 academics, businesses, civil society organisations and research institutions, aligns with the recommendations from the European Scientific Advisory Board on Climate Change (ESABCC) and the European Parliament’s position ahead of COP29. The absence of a limited contribution from LULUCF is a step back from the already agreed 2030 target. 

The proposed amendment also implies a decoupling of the political process for the 2035 NDC¹, which is to be submitted to the UN by September, setting the course for an unambitious mid-term target that is not on a pathway consistent with the proposed 2040 target, effectively delaying climate efforts to the second half of the decade. As a result, the EU could emit an additional 1.46 GtCO2e over the 2030-2040 period. The EU should therefore submit a 2035 target that is consistent with 2040 and sets the continent on the right course towards climate neutrality. 

Given the domestic nature of the Climate Law, the 90% target should put its full attention and priority on climate action within the EU, with international credits sitting on top of this domestic target. Allowing investments in projects outside of the EU weakens the impact of the target and sends the wrong signal to the industry: that a clean industrial transition can only be achieved in Europe by investing outside the Union. While Mario Draghi calls for further domestic investments to strengthen EU competitiveness, the Commission ignores this key recommendation with this loophole. Concerns over the quality of international credits mean that such loopholes will have to be strictly managed to avoid further backsliding. In the proposal, the inclusion of international credits remains a possible option only for 2036 at the earliest, a welcome limitation. While the proposal states that these credits must be fully verifiable and comply with stringent quality standards defined under EU law, it is unclear which EU law can provide this. Meanwhile, EU businesses need clear and reliable rules to plan for the transition to climate neutrality. With this proposal, the Commission only provides uncertainty.  

Quotes: 

Europe cannot outsource climate neutrality. To stay on track and maintain industrial competitiveness, the EU must commit to ambitious domestic action and set clear and separate targets for emissions cuts, permanent removals, and LULUCF. International credits which should help advance global climate action is instead being used to dilute domestic efforts. – Mark Preston Aragonès, Head of Carbon Accounting, Bellona Europa 

With most Europeans recognising climate change as a serious threat and supporting climate neutrality by 2050, it is crystal clear that citizens demand meaningful climate action. EU policymakers must listen to their citizens and deliver the targets needed to meet this mandate. – Amélie Laurent, CDR Policy Advisor, Bellona Europa 

Context:  

The EU has the ambition to become the first climate neutral continent by 2050. To get there, a target was set to reduce net emissions by 55% compared to 1990 levels by 2030. Since important intermediate targets for 2035, 2040 and 2045 have not been set yet, the Climate Law is being amended. The inclusion of 3% of international credits for achieving 90% in emission reductions would be an unprecedented move, first brought into discussion by Germany. It sets a precedent that challenges the internationally agreed upon convention to achieve climate targets through domestic action. While these credits may be included after 2036, MEPs already opened discussions on using them earlier and increasing their share in meeting the target. Meanwhile, on the international stage, ahead of the COP in Belém, the EU has to file its Nationally Determined Contributions (NDC) by the end of September.