Headlines
EU Parliament backs new 2040 climate target
Published by Global Banking & Finance Review®
Posted on November 13, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 13, 2025
2 min readLast updated: January 21, 2026
The EU Parliament has approved a plan to cut emissions by 90% by 2040, with 5% outsourced via carbon credits, setting a new climate target.
By Kate Abnett
BRUSSELS (Reuters) -The European Parliament on Thursday approved the EU's plan to cut greenhouse gas emissions by 90% by 2040 and outsource 5% of that target to countries outside the bloc via carbon credits, paving the way for it to be passed into EU law.
The plan, a hard-fought political compromise, falls short of the 90% emissions cut the EU's scientific advisors had said would be in line with limiting global warming to 1.5 Celsius - the level needed to avoid much more serious heat and drought.
But it is still more ambitious than most major economies' emissions-cutting commitments, including China's.
EU countries' climate ministers had already backed the plan last week, just in time to avoid going empty-handed to the U.N.'s COP30 climate summit, which began on Monday.
The European Parliament backed the target with a majority of 379 in favour, 248 against and 10 abstentions. Lawmakers also rejected a proposal by the Patriots for Europe, a far-right lawmaker group, to scrap the climate target completely.
EU countries and lawmakers will now negotiate final details of how to meet the target, which allows countries to buy foreign carbon credits to cover up to 5% of the goal. This weakens the emissions cuts required from European industries to 85% from 1990 levels.
Carbon credits, buying emissions cuts undertaken by other countries, have come under criticism for falling short of their promised impact. The EU has said it will draw up strict quality criteria for the credits it uses to meet its emissions pledge.
The pushback by some EU governments against climate measures this year coincides with a tough geopolitical backdrop that has left them scrambling to increase defence spending and support industries reeling from U.S. tariffs.
(Reporting by Kate Abnett; editing by Philippa Fletcher)
A carbon credit is a permit that allows the holder to emit a certain amount of carbon dioxide or other greenhouse gases. Companies can buy and sell these credits to meet regulatory limits on emissions.
Greenhouse gas emissions refer to the release of gases like carbon dioxide and methane into the atmosphere, which contribute to global warming and climate change.
The European Parliament is the directly elected parliamentary institution of the European Union, representing the citizens of the EU and involved in legislative processes.
Carbon credit trading is a market-based approach to controlling pollution by providing economic incentives for reducing emissions. Companies can buy or sell credits based on their emissions levels.
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