E.U. Adopts 2040 Climate Target
The European Union has set a target for member states to reduce greenhouse gas emissions by 90 percent compared to 1990 levels by 2040, with most cuts required to come from domestic sources. The use of international carbon credits is limited in achieving this goal, as some question the effectiveness of offset projects in delivering real emissions reductions.
European Union member states have committed to a stricter timeline for cutting greenhouse gas emissions. Following a vote by the E.U. Council, an amendment to the bloc’s climate regulation now applies across all 27 member states, requiring emissions to fall 90 percent by 2040 compared with 1990 levels.
According to the European Environment Agency, emissions in 1990 totaled about 4,726 million tonnes of CO2-equivalent, a metric that compares the warming impact of different greenhouse gases relative to carbon dioxide, the most prevalent.
For comparison, the Center for Climate and Energy Solutions estimates that U.S. emissions in 1990 were about 6,140 million tons of CO2-equivalent, nearly twice China’s output at the time and more than five times India’s.
Since 1990, E.U. emissions have declined to about 3,000 million tons by 2025, according to the figures cited in the plan. By comparison, annual emissions were estimated at 5,000 to 6,000 million tons in the United States, 13,000 to 14,000 million tons in China and 3,400 million tons in India. If fully implemented, the new E.U. target would reduce the bloc’s emissions to roughly 470 – 480 million tons of CO2-equivalent by 2040.
The 2040 target is intended as an intermediate step between the 55 percent reduction goal for 2030 and the net-zero target set for 2050.
Under the agreement, most of the emissions cuts needed to reach the 2040 goal will have to take place within the European Union itself. At least 85 percent of the 90 percent reduction must come from domestic cuts across the economy, including energy, industry, transport and buildings. Agriculture and land use are also identified as key areas for intervention.
One of the most contentious elements of the decision, and the subject of lengthy debate, is the limited role allowed for international carbon credits. Up to five percentage points of the total reduction may be achieved by purchasing high-quality credits generated by certified emissions-reduction or carbon-removal projects in partner countries outside the European Union.
A carbon credit is a tradable certificate representing the reduction or removal of one metric tonne of CO2-equivalent. Credits are generated by projects that avoid emissions or capture carbon, such as renewable energy installations, forest protection or soil carbon sequestration. Governments and companies can buy those credits and count them toward their climate targets.
In agriculture, the debate is especially relevant for crops and landscapes that can store carbon in soils and vegetation.
A limited number of initiatives have launched carbon credit markets in the olive oil sector, while the International Olive Council is working on a specialized project to reward sustainable land management. Research is also continuing into the potential of olive groves as carbon sinks for such markets.
For agriculture and the use of soils as carbon sinks, the European Union is developing a carbon farming framework. It is expected to identify agricultural practices that increase the capacity of soils and vegetation to absorb CO2, including olive orchard management. Those practices are expected to play an important role in determining which farming activities can generate certified carbon credits.
Part of the debate stems from scientific research questioning whether many offset projects actually deliver the emissions reductions they claim.
One recurring issue is “additionality,” the principle that a project should generate credits only if the emissions reductions would not have happened anyway. Because the baseline scenario is hypothetical, researchers say it is often difficult to verify whether a project produces genuine additional climate benefits, leaving room for inflated estimates of avoided emissions.
Several empirical studies have also raised doubts about the overall effectiveness of the offset market. One analysis of corporate carbon credit purchases found that 87 percent of the offsets used by companies carried a high risk of failing to deliver real and additional emissions reductions.
Other research has reached similar conclusions for specific types of projects. Academic studies examining forest and land-use offsets have found that only a small share of credits correspond to measurable emissions cuts, with some analyses estimating that fewer than 16 percent of issued credits provide real climate benefits.
Because of those concerns, scientists and policy analysts increasingly argue that carbon credits should play only a limited role in climate policy, with deep domestic emissions cuts remaining the most reliable path to reducing greenhouse gases.
“The European Union remains committed to leading the global fight against climate change while protecting our competitiveness and ensuring no one is left behind. Today’s adoption of the landmark 2040 climate target will give industry, citizens and investors the reassurance they need for the clean transition in the decade ahead,” said Maria Panayiotou, Cyprus’ minister of agriculture, rural development and environment, whose country currently holds the rotating presidency of the Council of the European Union.