In a bid to reach carbon neutrality, the European Union (EU) is pushing for a groundbreaking target to slash net greenhouse gas emissions by 2040.  

The European Union Commission put forward a recommendation on February 6th to cut net greenhouse gas emissions  90 percent by 2040, compared to 1990 levels.  

This goal is designed as an “interim” goal, meant to bridge the gap between the EU’s short-term and long-term emissions targets. To make the path to achieving climate neutrality more predictable for Member States, stakeholders, investors, and EU decision makers, the interim goals seek to build upon the EU’s existing “Fit for 55” 2030 target of 55 percent greenhouse gas emissions reductions, ensuring its full implementation and positioning the EU to achieve net-zero emissions by 2050. Current projections, however, show the EU is on track to fall short of the 55 percent target in 2030. 

The target proposal, based on a recommendation by the European Scientific Advisory Board for Climate Change to reduce emissions between 90 and 95 percent by 2040, is not legally binding. Rather, it sets a foundation for debate and future legislation after the European elections in June.  

Achieving the 2040 target 

Over the next sixteen years, the EU will need to curtail its reliance on fossil fuel energy by 80 percent while substantially expanding its emissions-free power infrastructure to facilitate the transition at scale. Doing so will improve energy independence and security. 

The Commission underscored the necessity of employing a wide range of net-zero technologies, including renewable energy, nuclear energy, energy efficiency, storage, Carbon Capture Storage, Carbon Capture Utilization carbon removals, geothermal and hydro-energy, and all other current and future net-zero energy technologies. 

It also highlighted that electrification will be at the core of the transition; aiming for renewables and nuclear energy to generate more than 90 percent of the EU’s electricity by the second half of the 2030s. In this scenario, solar and wind will make up most energy production. 

 Mobilizing industries and investment 

Achieving the recommended target necessitates a swift deployment of zero and low carbon technologies by 2040, fostering a robust domestic market for clean technology manufacturers, promoting research and innovation, and fortifying Europe’s industrial base to secure a leading position in the global clean technology, according to the Commission. 

The Commission also stated that substantial investments in infrastructure and urban planning will be imperative to support the transportation and storage of hydrogen and carbon dioxide. The agricultural sector will also play a crucial role in emissions reduction efforts while ensuring food security during the transition.  

Challenges to implementation 

Implementation of the 2040 target will pose several challenges for the EU, including: 

• Grid – Implementation of the 2040 climate target will necessitate upgrades and expansions of power grids and storage that require significant investment, regulation, and planning over the next 10-15 years.
• Finance – In the coming years, a coordinated European approach on finance in collaboration with Member States, the European Investment Bank, and financial institutions will be necessary. To achieve the target, an estimated additional 1.5 percent of GDP compared to the 2011-2020 decade will need to be invested in the transition.
• Social policies – Given the accelerated pace of the transition, a greater emphasis on a just transition, supported by initiatives such as the Just Transition Fund and the Emissions Trading System (ETS) funded Social Climate Fund, will be important.

 Climate diplomacy implications 

When presenting the target proposal, the Commission underscored the importance of driving global decarbonization efforts through EU climate diplomacy and partnerships, positioning the EU as an example for achieving the goals outlined in the Paris Agreement. It also emphasized the importance of active engagement in global carbon pricing diplomacy, complemented by policy instruments such as the Carbon Border Adjustment Mechanism (CBAM). 

The new 2040 target would inform the new Nationally Determined Contributions (NDCs) of the EU and its Member States’ 2035 NDCs, to be tabled with other countries in the first quarter of 2025.  

The timeline will be tight for the legislative process to codify obligations recommended in the 2040 target after EU elections June 2024, in time for new NDCs in Q1 2025  

At the conclusion of COP28, Parties agreed to the first global stocktake (GST), which included key policy signals to Parties, including transitioning away from fossil fuels and tripling renewable energy capacity. The GST also highlighted the urgent need for parties to incorporate its signals into their new NDCs. 

Building upon its project to support the GST process by ensuring a strong focus on opportunities to scale up climate ambition, C2ES is working to support momentum to implement the COP28 outcomes in countries’ NDCs. We await how the EU and its Member States will reflect the COP28 outcomes, particularly the global renewable energy target, and the proposed 2040 climate target, in their new NDCs.