The European Union has agreed on a legally binding target to reduce net greenhouse gas emissions by 90 percent by 2040 compared with 1990 levels, reinforcing its long-term trajectory toward climate neutrality by 2050. 

Under the provisional political agreement, member states will work collectively toward the 90 percent reduction, while allowing a limited use of carbon credits to help meet part of the target. This flexibility could ease short-term pressures on domestic industries by enabling up to five percentage points of the emissions cuts to be achieved through high-quality international carbon credits in compliance with the Paris Agreement. 

The target was reached through negotiations between the European Parliament and the Council of the European Union as they amended the bloc’s climate law to include an intermediate milestone between the existing 2030 goal and the 2050 net-zero objective.

Making the 2040 target legally binding provides clearer direction for EU climate policy and investment planning, though the inclusion of flexible carbon-credit mechanisms has prompted debate about the balance between ambition and economic feasibility.