Negotiations, Divisions, and Compromise: How the EU Landed Its 2040 Climate Goal

The European Union, once a pioneer in climate action with the Green Deal adopted in 2021, is experiencing a political shift regarding its climate policy trajectory. Economic stagnation and soaring energy prices have reignited industrial concerns and competitiveness pressures, prompting industry actors and several Member States to question climate ambition and place the von der Leyen II Commission under strain over industrial competitiveness.

In this tense environment, the current Danish Presidency of the Council of the EU inherited the challenging task of building consensus on future targets. An agreement was deemed essential to validate the EU’s Nationally Determined Contribution (NDC) ahead of COP30 in Brazil, the approval of which requires the unanimity of all European governments.

After nearly twenty hours of negotiations, EU Environment Ministers endorsed the 2040 climate objective in early November: a net reduction of 90% in greenhouse gas emissions tempered by a series of flexibilities built into the agreement. Achieved through intense bargaining and major concessions to Member States, the text was ultimately adopted by Parliament despite internal divisions within the right-wing European People’s Party (EPP). However, the agreement is strongly criticized by environmental organizations and regretted by committed MEPs who believe the concessions weaken climate ambition. This outcome illustrates the increasing complexity of the Union’s climate policy.

Member States Agreement Reflecting Europe’s Diverging Climate Paths

The position adopted by Member states on 5 November confirms the target proposed by the European Commission: a net 90% reduction in greenhouse gas emissions by 2040 compared with 1990 levels. Inserted into the EU Climate Law, this target is a cornerstone of the European Green Deal, reaffirming the ambition to make Europe the first climate-neutral continent by 2050.

This ambition is nonetheless moderated by several newly introduced flexibilities. Notably, the conditions for using international carbon credits have been relaxed. Member states will now be permitted to finance decarbonization projects outside the EU to offset part of their emissions, with the allowable share increasing from 3% to 5%. The Netherlands, Portugal, or Spain were among the most ambitious countries pushing to keep the cap at 3%, while France and Italy advocated for a 5% threshold and Poland argued for 10%. As a result, the domestic emissions-reduction requirement is effectively lowered to 85%.

At Poland’s request, the agreement postpones by one year—to 2028—the launch of the ETS2, the carbon market for transport and buildings. Secretary of State Krzysztof Bolesta argued that the ETS2 is the sole instrument likely to destroy public support for climate action in Europe. Crucially, the ETS2 is a core pillar of the legislative package aiming for a 55% net emissions reduction by 2030. The Commission had previously warned that altering this parameter risked jeopardizing the entire edifice, stressing the absence of viable alternatives for decarbonizing these key sectors.

Under pressure from Member states with significant automotive industries, such as Italy, the agreement also provides for a review of the measure requiring all new cars placed on the market to be zero-emission from 2035. The CO2 regulation review is expected when the Commission presents its automotive package on December 10.

The Council’s general approach also introduces the possibility of revising the 2040 target every five years, adjusting the objective in the event of under-performance of natural carbon sinks, and conducting a biennial assessment of its implementation.

Adopted by qualified majority, the agreement did not receive the support of Hungary, Slovakia, the Czech Republic, or Poland, countries that argue the European industrial sector cannot absorb new environmental constraints in an international context shaped by U.S. tariffs, competition from Chinese imports, and rising energy costs. Czechia’s environment minister, Petr Hladík, stressed that the economies of Central and Eastern Europe were under particular strain and called for technological neutrality so that member states could rely on the most cost-efficient pathways to meet the climate targets. Bulgaria and Belgium abstained.

A Divided EPP, Secret Ballots, and a Narrow Path to Approval

In plenary session on 13 November, the European Parliament adopted the 2040 climate target by 379 votes to 248, formalizing the compromise reached by the 27 member states. Internal divisions within the right-wing European People’s Party (EPP) prompted far-right groups to request a secret ballot on several parts of the text. Around fifty EPP members, mainly from the Polish and Spanish delegations, voted against it alongside far-right groups, European Conservatives and Reformists (ECR), Patriots for Europe (PfE) and Europe of Sovereign Nations (ENS).

MEPs rejected two amendments tabled by EPP members aiming to lower the reduction target from 90% to 83% and to postpone implementation of ETS2 by three years. They also voted down the proposal from far-right groups to reject the text entirely. Despite these fractures, the majority of the EPP ultimately aligned with the position defended by their president, Manfred Weber, during the secret ballot. The agreement was thus approved with the combined support of the Progressive Alliance of Socialists and Democrats (S&D), Greens-European Free Alliance (Greens/EFA), and Renew Europe groups, all committed to maintaining the 90% reduction objective.

Lena Schilling, the Greens’ rapporteur, stressed that “while the 90% target was preserved, the price is high.” The Austrian MEP expressed deep regret over the decision to allow the use of international credits, describing the mechanism as a “loophole” that “weakens our climate ambition.”

In this context, MEPs clarified how these additional international credits may be used. They will be limited to a maximum of 5% of each member state’s national trajectory in sectors not covered by the EU Emissions Trading System—including buildings, agriculture, small industry, waste, and non-aviation transport. Parliament also emphasized the need to guarantee the quality and verifiability of these credits so that they provide genuine climate benefits and support the most vulnerable countries in the Global South.

The next phase will involve interinstitutional negotiations between Parliament and the Council to finalize the legislation and enable its implementation at national level.

Positioning the EU for International Climate Negotiations

The adoption of this position also carried a significant diplomatic dimension for the European Union, allowing it to attend COP30, inaugurated on 10 November in Belém, with a clearly defined mandate—an especially crucial stance given the absence of the United States following its withdrawal under the Trump administration. The EU delegation presented a range for emissions reductions, targeting between 66.3% and 72.5% below 1990 levels, below the indicative 72.5% objective previously signaled by the European Commission

The 2040 objective, as finally adopted, appears less as a definitive achievement and more as a reflection of the deep political revision dynamics currently traversing European climate policy. This negotiation is fully situated within the context of the shift to the right in the European Parliament observed since the 2024 elections, notably through alliances between the right and the far-right, as illustrated by the recent adoption of major reductions in environmental reporting obligations for companies. The 2040 compromise, marked by concessions, clearly indicates that environmental ambition is now filtered through the prism of political considerations and national priorities, raising questions about the future trajectory of the EU’s climate leadership.