The European Parliament has approved legislation on the bloc’s climate targets for 2040

On February 10, the European Parliament finally approved EU climate legislation, which includes the bloc’s goal of reducing emissions by 90% by 2040 compared to 1990 levels. This is stated in a press release from the institution.

The revised legislation provides flexibility in how the 2040 target is achieved. Starting in 2036, up to 5% of net emissions reductions (2% more than the EC proposal) can be achieved through high-quality international carbon credits from partner countries. This takes into account the concerns of several countries, including Italy. MEPs have included safeguards to prevent the financing of projects that are contrary to the bloc’s strategic interests.

The text also includes the possibility of using domestic permanent carbon sequestration to offset hard-to-reach emissions under the ETS, increased flexibility within and between sectors, and tools to achieve targets as cost-effectively as possible.

The implementation of ETS2, which will cover CO2 emissions from fuel combustion in buildings and road transport, is postponed by one year, from 2027 to 2028.

The EC will assess progress towards this target every two years, taking into account, among other things, the state of the EU’s industrial competitiveness. It will also look at energy price trends and their impact on both businesses and households, and assess the state of net absorption at EU level compared to what is needed to achieve the 2040 target.

Following the review, the European Commission may propose an amendment to EU climate legislation, which may include changing the 2040 target or taking additional measures to strengthen the support base.

Once approved by the European Council, the text will enter into force 20 days after its publication in the Official Journal of the EU.

At the same time, a document prepared by the governments of Italy, Germany, and Belgium ahead of the upcoming EU summit on the bloc’s competitiveness, which will take place on February 12, emphasizes the need to simplify regulations for industry, review the ETS mechanism and the CBAM carbon tax, and apply the principle of technological neutrality.

Recall that Czech Prime Minister Andrej Babiš, in a letter to EU institutions and leaders of the other 26 countries of the bloc published on February 2, called on the EU to review its carbon trading schemes in order to lower energy prices. He believes that the bloc should limit the cost of emission allowances within its ETS and postpone the implementation of its second phase.