EU sets focus on climate-friendly industry in 2040 climate target proposal
with contributions by Patryk Strzalkowski, Juliette Portala, Rudi Bressa
The Commission said its 90-percent target for 2040 is in line with the Paris Climate Agreement, and forms the foundation for the EU to continue to lead the way on international climate action, while creating opportunities for European industry to thrive in new global markets for clean technology. For this to happen, the bloc's sustainable growth strategy, the Green Deal, would have to become "an industrial decarbonisation deal," it said.
German and European industry representatives warned that the ambitious targets must not put EU companies at a disadvantage internationally, and that coming EU leadership should place companies front-and-centre. "The highly ambitious European climate protection target" must "not come at the expense of the competitiveness of the European economy", said Holger Lösch, deputy managing director at industry association BDI, in a press release. "Technical feasibility, economic efficiency and security of supply must be the focus of policy", Lösch continued, adding that the climate-neutral transition would require enormous investment in a very short time.
The head of Chemical industry association VCI, Wolfgang Große Entrup, said: "We want a climate-neutral Europe with a strong industry." The lobbyist called on the next Commission to ensure competitive green electricity, smart funding and a legally secure framework. "The Green Deal must now be followed by an Industrial Deal," he said.
The EU is aiming to make Europe the first climate neutral continent by 2050 and has decided to reduce greenhouse gas emissions by 55 percent by 2030, compared to 1990 levels, as a stepping stone. To reach the 2030 target, the EU spent the past four years overhauling its energy and climate legislation, such as on emissions trading, renewables buildout or emissions standards for vehicles.
However, it does not yet have an interim target for 2040, which is required by the EU climate law. It would "guide the right mix of policies and investments to shape Europe as a competitive and sustainable economy that delivers for the quality of life of people and society," the Commission said. Today's recommendation by the Commission is only an early step in a long process of deciding on the target and making it legally binding, which could stretch well into 2025. This June, EU citizens will elect a new parliament, and then a new Commission is going to be formed, which has a prominent role in shaping the policy direction for the next five years across the bloc – including the official legislative proposal for a 2040 target. Parliament and member state governments in the EU Council will eventually have to agree the target, and later the post-2030 policy framework to help reach it.
Green Deal must become industrial decarbonisation deal – Commission
Based on a detailed impact assessment, the Commission today recommended to reduce net greenhouse gas emissions by 90 percent by 2040 – the lower end of what the European Scientific Advisory Board on Climate Change (ESABCC) called for last year. The researchers had recommended emission reductions of 90–95 percent, "grounded on a science-based assessment addressing both fairness and feasibility."
The Commission says its recommendation is in line with the EU's commitments under the Paris Climate Agreement. It contextualises the recommendation within recent events: "The outcome of COP28 [UN climate change conference] in Dubai shows that the rest of the world is moving in the same direction," it writes, and then charts the way forward.
"The EU has been leading the way on international climate action, and should stay the course. […] The Green Deal now needs to become an industrial decarbonisation deal that builds on existing industrial strengths, like wind power, hydropower, and electrolysers, and continues to increase domestic manufacturing capacity in growth sectors like batteries, electric vehicles, heat pumps, solar PV, CCU/CCS, biogas and biomethane, and the circular economy," writes the Commission.
Fossil fuel consumption for energy down 80 percent by 2040, coal to be phased out
To reach the target the Commission is asserting the need to fully implement the agreed policies to reach 2030 targets, whilst ensuring the competitiveness of the European industry, focus heavily on a just transition. The Commission also emphasises the need for a level playing field with international partners, and a strategic dialogue on the post-2030 framework, including with industry and the agricultural sector.
The Commission also suggested than an additional 1.5 percent of GDP compared to the 2011-2020 decade should be invested annually in the transition, with the largest part coming from the private sector. Energy system investment needs amount to close to 660 billion euros (equivalent to 3.2 percent of GDP) per annum on average over the entire period 2031-2050 (against €250 billion over 2011-2020, or 1.7 percent of GDP, a decade with relatively low investments in the energy system), and yearly spending on transport to about 870 billion euros (equivalent to 4.2% of GDP, a similar proportion of GDP as in 2011-2020). The Commission also warned of the costs of inaction, if climate change effects lead to deaths and damage, and it emphasises that the transition can generate "major new opportunities"
Renewables must be expanded, whereas the consumption of fossil fuels for energy by 2040 is expected to reduce by approximately 80 percent compared to 2021 and coal will be phased out. The electricity sector would be fully decarbonised in the second half of the 2031-2040 decade. Transport emissions are projected to decrease by close to 80 percent by 2040. Achieving the recommended target in 2040 and climate neutrality by 2050 would enable the EU to cut the cost of fossil fuel imports by around 2.8 trillion euros over the period 2031-2050, compared to what the EU imported on average in 2011-2020, the Commission added.
It says achieving the 90 percent target will require both emission reductions and the removal of carbon from the atmosphere, including deployment of carbon capture and storage (CCS) technologies, as well as the use of captured carbon in industry (CCU). It therefore also presented a strategy aiming to establish a comprehensive framework on industrial carbon management today. [Read a Q&A on an earlier draft, which will be updated soon.]
The Commission also launched an Industrial Alliance to facilitate stakeholder's cooperation at EU level to accelerate the deployment of Small Modular Reactors (SMRs).
The climate law also requires the Commission to publish the projected greenhouse gas budget for the bloc for 2030-2050, defined as “the indicative total volume of net greenhouse gas emissions that are expected to be emitted in that period without putting at risk the Union’s commitments under the Paris Agreement.”
Government and politics
Jennifer Morgan, German state secretary and special envoy for international climate action
"The European Commission's proposal for the EU climate target for 2040 adds an important stepping stone to the EU modernisation plan for a competitive European economy, secure jobs, clean energy, social justice, and a climate-neutral future," Jennifer Morgan wrote on social network X. Aligned with the EU’s 2030 greenhouse gas reduction target and the bloc's commitment to achieving net zero by 2050, the "2040 milestone on path to climate neutrality" would create "more investment security" and help "contribute to making the EU a production centre for climate-friendly technologies."
Wopke Hoekstra, European Commissioner for Climate Action
"Today is another step in the European Union's journey towards climate neutrality," said European Commissioner for Climate Action Wopke Hoeakstra in Strasbourg. "We've just lived through the hottest summer on record, and we've seen for ourselves the devastation that climate change brings sadly ever more in human lives," Wopke said, adding that inaction would lead to far larger and snowballing costs in the coming decades. In his speech, he called for a concrete roadmap to boost and finance technologies across Europe, ramping up affordable clean energy and a comprehensive investment agenda to attract private capital.
Urszula Zielińska, Polish vice-minister for climate and environment (The Greens)
"This communication is a starting point for public debate, not a binding legal document," said Poland's vice-minister for climate and environment Urszula Zielińska. "It does not require any new targets for 2040 to be set [by Poland] right now. Following the publication of the Commission's communication, we will analyse and conduct a thorough and broad public consultation. For now, we are focused on meeting the climate commitments that have already been set, like the 2030 target of 55% emission reduction."
Leonore Gewessler, Austria’s minister of climate action, environment, energy, mobility, innovation and technology
"I am glad that the EU Commission has presented an ambitious climate target for 2040 today", Gewessler wrote on X. "Austria has set itself the goal of being climate neutral by 2040 - and a good European climate target supports our work. 90 percent emission reductions compared to 1990 are an ambitious but necessary statement. Fewer climate-damaging emissions also means a better quality of life, more intact nature and cleaner air. We have it in our hands to avert the climate crisis. The new climate target is an important step towards stopping the climate crisis. Now it is important to breathe life into this goal in the upcoming negotiations and thus really protect our climate. I will strongly advocate for this - we have no time to lose."
Rob Jetten, Dutch minister for climate and energy policy and deputy prime minister
Dutch minister for climate and energy policy Rob Jetten welcomed that EU climate commissioner Wopke Hoekstra followed the advice of the scientific advisory council. "The government will soon come up with a comprehensive response," Jetten wrote on X. "With the current European climate policy, you already reach about an 88 percent reduction by 2040. The last mile towards 2050 weighs the heaviest, so the further we get in 2040, the more the goal of being climate neutral in 2050 will be in sight. The proposal also looks at climate and industrial policy. These are increasingly reinforcing each other. Clear goals create opportunities for new growth markets in a sustainable, circular economy. There seems to be broad support among member states for this ambition. That is good."
Pascal Canfin, member of the European Parliament, chair of the environment committee
“This communication makes it possible to set a milestone in 2040 to ensure that the European Union remains on the path to carbon neutrality by 2050," wrote Pascal Canfin, French member of the European Parliament, in a post on LinkedIn. "This will also provide maximum predictability for companies to secure their investments. […] With a climate objective of -90% by 2040, we will halve our dependence on fossil fuel imports. […] This objective is not a further acceleration of climate action, it is the extension of the pace of reduction to which we have already committed.”
On the need to change approach in the agricultural transition, Canfin wrote: “As the current crisis shows us, going further in terms of agro-ecological transition requires changing the approach. For several years now, I have been defending an approach that places the rules of the game on mid-chain players, and not just on farmers as is currently the case. This could involve the establishment of a regulated carbon and biodiversity market for the main economic players in the food value chain. This would complement the CAP and provide farmers with consistency between additional financing and additional commitments since such a market would transfer value to farm prices.”
Michael Bloss, German Green Party, member of the European Parliament
The recommendation is "barely scratching the surface of what science tells us we need," said EU lawmaker Michael Bloss. "To turbocharge our economy, the EU must slash CO₂ emissions by a whopping 95 percent by 2040." Bloss criticised "plans to keep gas and coal plants running, alongside hefty investments in unproven CCS technology."
"The Green Deal is gradually being torn apart. The European elections will be about preventing the shift to the right in climate protection," he added.
Katharina Dröge, Green parliamentary group head in the Bundestag
Green parliamentary group head Katharina Dröge has described the planned presentation of new climate targets for 2040 by the EU Commission as "right and important". "The sooner we act, the easier, more reliable and more socially just the climate protection measures can be," she told ZDF Morgenmagazin. It therefore makes sense to "define interim targets, which can then be reviewed and backed up with measures".
Industry and business
Holger Lösch, deputy managing director at industry association BDI
German industry has called on politicians to prevent market disadvantages for European companies in international competition when implementing the new EU climate target. "The highly ambitious European climate protection target" must "not come at the expense of the competitiveness of the European economy", said Holger Lösch, deputy managing director at industry association BDI, in a press release. "Technical feasibility, economic efficiency and security of supply must be the focus of policy", he said, adding that the climate-neutral transition would require enormous investment in a very short time.
Ingbert Liebing, Head of the Association of Local Utilities (VKU):
"It is good that the European Commission is reviewing the path to climate neutrality by 2050 and wants to set an interim target for 2040," VKU’s head Ingbert Liebing stated in a press release. "For the municipal companies that are supposed to implement all of this, planning and investment security are important. Therefore, everything that has been developed in the past four years with the 'Fit for 55' package must not be questioned again. More ambitious goals are not always crucial, but implementation is. It is good that the European Commission wants to focus more on the issue of funding than before."
Wolfgang Große Entrup, head of the German Chemicals Industry Association (VCI)
"Ambitious climate targets, in particular, must be achievable. Anything else will damage credibility and Europe as a business location,” VCI head Wolfgang Große Entrup said in a press statement.
He emphasized that a successful climate policy can only work with a competitive industry: "We want a climate-neutral Europe with a strong industry. This is only possible with a lot of competitive green electricity, smart funding and a legally secure framework.” According to Große Entrup, the transformation could only be successful if the new Commission succeeds in achieving a "fundamental policy change": "The Green Deal must now be followed by an Industrial Deal."
Bertram Brossardt, head of the Bavarian Industry Association (vbw)
The Bavarian Industry Association (vbw) considers the European Commission's proposed climate target for 2040 to be "logical" in order to meet climate targets, but is calling for "more pragmatism" from the EU, especially in industrial policy. "Only a competitive industry can generate the necessary investment for change”, said vbw’s head Bertram Brossardt in a press release. Among other things, this would require measures to reduce energy prices, such as a European bridge electricity price, the expansion of renewable energies and grids as well as the development of a European hydrogen economy "at the greatest possible speed", Brossardt stated. He added, that the Green Deal should be in no way inferior to the American IRA.
Simone Peter, president of the German Renewable Energy Federation (BEE)
The German Renewable Energie Federation (BEE) welcomed the proposals, but calls for necessary improvements. "Although the Commission has set an important milestone on the road to climate neutrality, it remains without courage," commented BEE president Simone Peter, highlighting that the scientific advisory board has recommended a CO2 reduction target of 90 to 95 percent for 2040. The proposals would now have to be combined with "independent targets for the expansion of renewable energies and the increase in energy efficiency“ in order to underpin climate targets, Peter said.
Paul Voss, director general of industry lobby group European Aluminium
Industry lobby group European Aluminium emphasised the need for coherent energy, trade and industrial policies "that facilitate the industry's decarbonisation and incentivise recycling while remaining competitive on global markets." According to a press release, Europe's climate ambitions should not be achieved "at the expense of its manufacturing capacity nor increase import dependencies across the aluminium value chain."
"The link between climate, trade and industrial policy must be strengthened and at the forefront of the agenda of the next EU Commission. We are ready to work with the EU Commission and the Member States on bridging solutions to bring down the cost of energy and boost the transformation of our industry while remaining competitive on global markets," said Paul Voss, director general of European Aluminium.
Researchers and analysts
Ottmar Edenhofer, Chair of the European Scientific Advisory Board on Climate Change
“The European Commission put forward today a 90 percent reduction target by 2040. This level of ambition is needed to deliver on EU’s commitments under the Paris Agreement," said Ottmar Edenhofer, Chair of the European Scientific Advisory Board on Climate Change. " The Advisory Board welcomes the fact that our scientific advice has been taken into account. Delivering on these emission reductions will require increased focus on implementation, enhanced efforts in all sectors, as well as more international cooperation with EU partners. This transition will bring substantial benefits for the EU economy and EU citizens, and can be achieved in a just and fair manner.”
Paulina Sobiesiak-Penszko, Director of the Sustainable Development and Climate Policy Program at think tank Institute of Public Affairs (Poland)
"The 2040 target and roadmap proposed by the Commission for the first time focus on transformation in agriculture. While reducing the sector's climate and environmental impact is necessary, this change cannot be imposed on farmers without dialogue and solutions to the problems that have been plaguing the sector for years. Agriculture in Europe and Poland has been troubled by structural issues for a long time, climate policy is s becoming the scapegoat and this should become an opportunity for improving the financial stability of small and medium-sized farmers"
Davide Panzeri, Europe program manager at think tank ECCO
"The timing of decarbonisation is driven both by the escalating climate damages (approximately 1% of GDP in the eurozone already in 2019 according to the ECB) and by the international race towards new green technology markets (estimated to be worth around $650 billion annually by the International Energy Agency by 2030). In this context, setting the decarbonisation target for 2040 is not an artificial exercise to push towards unattainable goals, but a valuable opportunity to provide clarity on the necessary pathway towards climate neutrality by 2050."
Simone Tagliapietra, senior fellow at Bruegel Institute
“Climate policy is becoming complicated, emotional, risky," said Simone Tagliapietra, senior fellow at Bruegel Institute, in an article in Ouest France. "To be socially acceptable and politically viable, strong actions will be needed in the coming years, such as new green financing and strengthened energy governance. […] The application of already approved measures alone makes it possible to get closer to 90 percent in 2040, but this objective remains revolutionary, it will require massive decarbonisation of the sectors where it is difficult to do so.”
Michal Smolen, head of the Energy & Climate research program at think tank Instrat (Poland)
"Our assessment suggests that reduction of Poland's emissions by about 65-70 percent by 2040 is not only possible, but also economically optimal, given the development of clean technologies and the rising price of ETS that will cover more sectors of the economy in the future. In the 2040s, coal- and gas-fired power plants will be pushed to the role of a seldom-activated reserve (accounting for 5-7% of annual power generation), although in Poland it will be difficult to fully shut them down even by 2040."
Matthias Buck, Director Europe at Agora Energiewende
“The recommended 90 percent target is a welcome signal and an important waypoint in Europe’s transition to climate neutrality, and it will provide investment certainty to companies and individuals. The Commission however puts too much emphasis on technologies such as carbon capture and storage and too little on the readily available and cost-effective solutions such as accelerating renewable energy deployment, direct electrification of end-uses and circular economy. It will now be crucial to focus the debate on how Europe can successfully cut emissions by 90 percent over the next 15 years while strengthening solidarity, competitiveness and sovereignty.”
Linda Kalcher, Executive Director of the pan-European think tank Strategic Perspectives
“The European Commission’s proposal is ambitious but realistic“, commented Linda Kalcher, Strategic Perspectives's Executive Director. "It makes a strong economic case for reducing the EU’s fossil fuel dependence in the wake of COP28 in Dubai. Cutting fossil fuel use by 80 percent is an important first step to strengthen energy security. Setting clear end dates for coal, oil and gas is essential for a just transition in the energy sector and can make the EU a pioneer on an orderly fossil fuel phase-out."
Élisa Giannelli, programme lead on climate governance and EU politics at E3G
“The EU must strengthen its industrial policy and the social dimension: with the electoral campaign, getting the wrong approach would strengthen the conservatives and the populists.”
Mia Moisio, NewClimate Institute for climate policy and global sustainability
"The EU should increase its present 2030 target to at least 65 percent below 1990 levels, including its land use sink, to meet the minimum requirements of getting its domestic emissions onto a 1.5-degree pathway, and it should also increase its 2040 target to at least the recommended 95 percent reduction," said Mia Moisio of NewClimate Institute in a press release.
Lee Beck, Senior Director for Europe and the Middle East at advocacy group and think tank Clean Air Task Force
The new 2040 EU climate targets would provide a wish list, but "no blueprint for action," non-profit climate and energy advocacy group and think tank Clean Air Task Force said in a press release. "The communication signals a strong reaffirmation of climate ambition, yet it lacks technology-inclusive and politically viable action plans that ensure these ambitions are attainable, securing economic and energy stability while achieving emissions reductions," said Lee Beck, Senior Director for Europe and the Middle East at Clean Air Task Force.
The document did not venture far beyond existing Green Deal policies, according to Clean Air Task Force, and the non-binding nature of the text and its timing at the end of the current legislative term would mean "that it is a display of ambition, rather than a plan for action."
Sarah Heck, non-profit climate science and policy institute Climate Analytics
"While a 2040 target is welcome, governments must still remain laser-focussed on improving their climate action within this decade, by strengthening their 2030 targets," commented Sarah Heck from non-profit climate science and policy insitute Climate Analytics in a press statement. "Without governments taking strong pre-2030 climate action, it's highly unlikely the world will be able to meet anything like net zero by 2050, let alone a strong 2040 target," she said.
Carlo Carraro, Emeritus Rector of Ca' Foscari University Venice, former member of the IPCC board
"The document drafted by the Commission is well-crafted. It represents a complex endeavour that has engaged numerous scientific and legislative experts. An essential aspect of the democratic process is that it has been shaped by public consultation, thereby incorporating perspectives from the realms of industry, agriculture, and civil society. Furthermore, it marks a significant milestone by demonstrating that the benefits of the transition far surpass the associated risks."
Caroline François-Marsal, in charge of European issues for Réseau Action Climat (RAC) France
Caroline François-Marsal of NGO RAC France criticised the emphasis on carbon capture and storage technologies in an article by Libération: “The Commission has taken a step forward with its proposal, but we must not rely on these new technologies. […] Alongside reducing emissions, which is the absolute priority, the European Union must above all invest in preserving and restoring our natural carbon sinks, our forests and our soils. They are currently in too poor condition to sequester the CO2 that we are hoping for. Without that, we won’t reach our goals.”
Lutz Weischer, head of the Berlin office at Germanwatch
Germanwatch said the proposal is not ambitious enough. "This conservative proposal for the 2040 climate target is only the absolute minimum of what is necessary," said Lutz Weischer, head of the Berlin office of the environment and development organisation Germanwatch. "A 95-percent climate target would be a much better choice – also for the EU's technological leadership and energy sovereignty." Germanwatch also criticised the fact that the Commission's proposal lacks an end date for fossil fuels. "By phasing out all fossil fuels by 2040, the EU would show that it is taking the groundbreaking resolutions of the UN climate change summit in Dubai seriously," said Weischer.
Lisa Okken, policy advisor Climate & Energy at WWF Germany
The EU is showing "too little ambition", criticised Lisa Okken from the environmental organisation WWF in a press release. "Despite the Green Deal, the EU Commission does not switch the traffic light to green for the climate target for 2040. We no longer have time for half-hearted climate protection. And even if the EU means its commitments on the international stage, such as at the COP, it should now fully accelerate instead of hitting the brakes. Historically just and in line with the 1.5-degree limit would be achieving complete greenhouse gas neutrality by 2040 in the EU."
Cosimo Tansini, policy officer for renewable energy at the European Environmental Bureau (EEB)
"Aiming for 90 percent emissions reductions only brings the EU in line with the minimum requirements for a sustainable Europe according to the ESABCC," Cosimo Tansini, policy officer for renewable energy at the European Environmental Bureau (EEB), said in a press statement. "Not only is this insufficient to mitigate dangerous climate impacts, but the EU is relying on underdeveloped technologies to achieve its targets. Carbon neutrality by 2040, supported by a 100% renewable energy system, is possible. And it can be done without these technologies, by focusing instead on demand reduction, grid development and accelerated renewable energy deployment."
Sofie Defour, climate director at clean transport campaign group Transport and Environment
"Today, the EU showed the world how you can turn real climate ambition into powerful industrial policy,“ said Sofie Defour, climate director at Transport and Environment. "Industry players at home and outside of Europe can turn to the EU for production and sales of green tech, as they can be assured of a growing market and predictable demand. But this headline goal will fall flat if it doesn't come hand in hand with a phase out of fossil fuels and new laws cracking down on the oil majors. Europe will desperately try to meet a 2040 goal whilst still feeding on fossil fuels."
Michael Sicaud-Clyet, climate & energy policy officer at WWF European Policy Office
“It is very disappointing to see that the European Commission did not even look at the possibility of reaching climate neutrality by 2040, and is hence clearly moving away from the Paris Agreement. We’ve seen from recent health and energy security crises what governments can do when they put their minds to it, and we should be treating the climate emergency as the existential threat it is. The EU is to a large extent responsible for the current fire, so it cannot lean on others to be the firefighters."