The European Commission is set to propose a legally binding goal to cut net greenhouse gas emissions by 90% by 2040 from 1990 levels. For the first time, countries may partially use international carbon credits to meet this target. The proposal aims to align the EU with its 2050 net-zero emissions goal, while easing domestic industrial burdens.

BulletsIn

• EU to cut net emissions by 90% by 2040 from 1990 levels
• First time foreign CO₂ credits allowed to meet part of target
• Up to 3% of cuts may come from credits under U.N.-backed market
• Credits phased in from 2036; rules on quality and origin planned
• Domestic industries get flexibility on sector-wise emission reductions
• Germany, France, Italy pushed for relaxed rules amid energy, trade pressure
• Past targets based only on EU-internal reductions
• EU aims net-zero by 2050; 2040 target key interim step
• Climate advisers warn foreign credits may divert local investment
• New 2035 climate target due to U.N. by mid-September