EU sets 90% emissions cut by 2040, delays transport/buildings carbon market to 2028.

EU countries have approved an amendment to the European Climate Law, setting a binding 90% reduction in net greenhouse gas emissions by 2040 compared to 1990 levels, with at least 85% of cuts required domestically. Member states may use up to 5% of high-quality international carbon credits from Paris Agreement-aligned projects starting in 2036. The launch of the EU’s emissions trading system for transport and buildings is delayed to 2028. The change, proposed in July 2025 and agreed upon in December 2025, completes the legislative process and will take effect 20 days after publication in the Official Journal.