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EU Sets Binding 90% Emissions Cut by 2040 With Limited Offset Flexibility

The deal pairs a binding 2040 cut with limited outside credits to show unity at COP30.

Overview

  • Member states approved allowing up to 5% of the target to be met through credits from reductions outside the EU, with a possible extra 5% if domestic cuts are impeded by events such as wildfires.
  • The launch of a new emissions trading system for heating and road fuels was postponed by one year to 2028.
  • An interim 2035 reduction band of roughly 66.25–72.5% was set, though only the 2040 target carries legal force.
  • A review every two years will assess impacts on economic competitiveness and can trigger adjustments to the pathway.
  • Environmental groups condemned the outside-credit option as a loophole and an accounting trick, as the EU prepares to present the package at COP30 in Belém, where leaders meet Nov. 6 and the conference opens Nov. 10.