When European Commission President Ursula von der Leyen signed the EU’s updated Climate Law into force last spring, the ceremony in Brussels was brief and almost businesslike. But what the legislation actually commits Europe to is anything but modest. The binding 2040 target — a 90% reduction in net greenhouse gas emissions compared to 1990 levels — sets a trajectory that will touch every sector of the European economy, every member state government, and millions of businesses and households across the bloc.
What 90% actually means
The number sounds straightforward. It is not. The 90% target is a net figure, meaning it accounts for carbon removals — through forests, soil carbon and, crucially, carbon capture and storage technologies — as well as gross emission reductions. The European Environment Agency estimates that reaching 90% net requires roughly 85% gross emission cuts across the economy, with the remaining 5% offset by land use and technological carbon removal at a scale that does not yet exist in Europe.
The Commission’s own modelling, published alongside the law, makes clear that achieving this requires the complete phase-out of coal by 2030 (largely accomplished), a near-complete decarbonisation of the power sector by 2035, an accelerated electrification of transport and heating, and significant emissions reductions from agriculture — a sector that has historically resisted climate legislation more effectively than any other.
Who carries the burden
The law sets the EU-wide target but leaves the distribution of effort across member states to be negotiated through a revised Effort Sharing Regulation — a process that is already generating significant friction in Brussels. Wealthier member states with historically higher per-capita emissions face steeper national targets, while Central and Eastern European countries, more dependent on coal and gas, are pressing for longer transition timelines and larger allocations from the EU’s Just Transition Fund.
Poland’s situation is emblematic. Warsaw has committed to the EU-level target while simultaneously defending the role of domestic coal in its energy mix through the mid-2030s — a tension that Brussels is watching carefully. The European Court of Justice has previously found against member states for failing to implement climate legislation, and the Commission has signalled it intends to use infringement procedures more readily under the new framework.
Industry’s reaction
European business associations have broadly accepted the 2040 target while raising specific concerns about implementation timelines, investment certainty and the risk of carbon leakage — the phenomenon where emissions-intensive production simply relocates outside the EU rather than being eliminated. The Carbon Border Adjustment Mechanism, fully operational since 2026, is designed to address leakage for certain imported goods, but its coverage is limited and its administration complex.
The automotive sector, already navigating the 2035 internal combustion engine phase-out, faces the most acute transition challenge. Chemical manufacturers, steel producers and cement companies are each plotting decarbonisation pathways that require hydrogen infrastructure and carbon capture investments running into hundreds of billions of euros — most of which remain dependent on public subsidy frameworks that have not yet been finalised.
The 2026 reality check
Despite the ambition of the 2040 target, the EU’s current emissions trajectory tells a more complex story. Net emissions fell approximately 8% in 2025, slightly ahead of the required annual pace — but the easy reductions from power sector decarbonisation are largely behind us. The harder work, in transport, buildings, agriculture and heavy industry, is only beginning. Whether the political will to sustain that effort exists across 27 member states over the next fourteen years is the question that no climate law, however well-drafted, can answer.
