On March 5, the Council of the EU formally adopted an amended European Climate Law. It was, by any reasonable measure, a significant legal moment: the bloc locked in a binding target to cut net greenhouse gas emissions by 90% by 2040, compared to 1990 levels, putting a hard number into statute on the path to full climate neutrality in 2050. The European Parliament had passed the text three weeks earlier, 413 votes to 226. The signature ceremony was on March 11. It entered the Official Journal on March 18 and took legal effect on April 7.
EU Green Week opens in Brussels this week — June 3 and 4 at the Charlemagne building, with the theme “Investing in a nature-positive economy.” Commissioner Jessika Roswall will give the opening keynote. There will be TED-style talks and a startup-investor matchmaking event. The framing, per the Commission’s own description, is that “environmental ambition meets economic reality.”
That last phrase is doing some heavy lifting right now.
What the 2030 number actually looks like
Before you can take the 2040 target seriously, you have to ask whether the 2030 target is on track. The answer, with four years to go, is: probably not, at least not for the countries that matter most.
The EU’s 2030 commitment is a 55% reduction in net emissions versus 1990 levels. In October 2025, the Commission published its assessment of the member states’ updated National Energy and Climate Plans — the documents each country submits setting out how it intends to hit its share of the target. The Commission’s conclusion was that the gap had narrowed. The Climate Action Tracker’s assessment of the same material is less reassuring: the EU is “not fully on track” to meet its 2030 goal, and the overall rating on the EU’s climate action is “Insufficient.”
The granular picture is worse. Analysis published by Transport & Environment found that 12 EU member states are failing to comply with their binding national 2030 targets under the Effort Sharing Regulation. Germany is projected to miss its target by around 10 percentage points — a shortfall so large that it would alone require 70% of the available carbon credits that non-compliant countries can purchase from over-performing neighbours. Italy is tracking approximately 7.7 percentage points short of its required reduction, which T&E estimated as a potential liability of €15.5 billion. The two countries together would essentially exhaust the credit market, leaving other non-compliant states with nothing to buy and the prospect of legal proceedings.
A Euronews investigation published on May 28, four days ago, put this in plain terms. Germany is on track to miss its 2030 emissions goal. Italy is unlikely to meet its required target, according to a 2026 report by the Italian Institute for Environmental Protection and Research, which cited “critical issues” in Italy’s energy transition and the decarbonisation of transportation. The Effort Sharing Regulation analysis by the European Climate Research Alliance finds an overall policy gap of around 89 million tonnes of CO₂ equivalent — meaning the EU risks missing its 2030 Effort Sharing target by nearly two percentage points even if every country that has submitted a plan delivers exactly what it promised.
Spain is the counterexample most cited in Brussels. Its renewable energy mix is above the EU average, clean sources made up 75% of its electricity in 2025, and its power sector emissions have fallen more than two-thirds over two decades. But Spain is one country, and its performance cannot compensate for Germany and Italy simultaneously running behind.
The 2040 target: what the text actually commits to
The March 2026 legislation is more complicated than the headline figure suggests, and the complications matter.
The 90% target is a net figure, not a gross one. It includes land use, land-use change and forestry — the LULUCF sector, which covers the carbon stored and released by forests, agriculture, and soil. Including LULUCF in the headline target is not straightforwardly meaningful, because those sinks are more variable and less controllable than industrial emissions. Climate Action Tracker’s analysis notes that when you strip out LULUCF, the 90% net target translates to roughly 85% in actual emissions reductions from energy, industry, transport, and buildings. The organisation’s view is that this is broadly consistent with 1.5°C domestic pathways, but that the path from 2030 to 2040 has not been assessed as a whole.
There is also the flexibility mechanism. From 2036, up to five percentage points of the 90% reduction can come from “high-quality international carbon credits” — emissions reductions achieved in partner countries rather than within the EU itself. Parliament pushed this up from the Commission’s original proposal of 3%. The Council of the EU’s press release describes this as allowing the target to be met in a way that is “both ambitious and cost-efficient.” Climate Action Tracker describes it differently: if the EU deploys the full five percentage points of international credits, it only needs to make an 85% domestic reduction, which means its residual emissions in 2040 will be 50% higher than they would be under a fully domestic pathway, creating a greater burden for carbon removal technologies in the 2040s.
A separate provision postponed the launch of EU ETS 2 — the emissions trading system that would cover buildings and road transport — by a year, from 2027 to 2028. ETS 2 was already politically contentious before the delay; it would put a carbon price on heating fuel and petrol for households and small businesses, sectors that have not previously faced direct carbon costs. The one-year delay is not, in itself, significant. What it signals is that the political appetite for imposing visible energy costs on households — while energy prices are already elevated by the Hormuz crisis and rearmament spending is compressing budgets — is limited.
Green Week’s uncomfortable subtext
The theme this year — investing in nature — is positioned explicitly as an economic argument rather than a moral one. The conference programme describes nature investment as “a strategic necessity for economic stability, security and long-term competitiveness.” Commissioner Roswall’s keynote will open with exactly that framing. The message is designed to answer the criticism that has been mounting since 2022, and more sharply since the rearmament debate accelerated this year: that climate policy is a luxury commitment, one that governments under fiscal pressure will deprioritise.
That criticism has real data behind it. The European Court of Auditors has pointed to a significant funding gap for the low-carbon transition, noting that while the EU earmarked 30% of its budget to 2027 for climate goals, this represents only around 10% of the investment actually needed. The Recovery and Resilience Facility, which channelled significant green investment through post-pandemic recovery plans, has wound down. The ECNO analysis found gaps in member states’ renewables and energy efficiency contributions, in projected emissions reductions, and in progress on phasing out fossil fuel subsidies.
Against this, defence spending is now the political priority in a way it has not been since the Cold War. The fiscal escape clause invoked by seventeen member states under the ReArm Europe Plan does not formally reduce climate budgets — the clause allows additional borrowing specifically for defence. But government balance sheets are not infinitely elastic. When capitals face competing demands for limited political bandwidth and limited fiscal space, decisions about which investments get priority and which get deferred are made, sometimes explicitly and sometimes not. Poland is spending 4.48% of GDP on defence. Romania has committed €16.7 billion in SAFE defence loans against a GDP of roughly €300 billion. These are not countries with spare capacity for ambitious domestic decarbonisation programmes.
Bruegel’s policy brief on the four critical risks for the 2040 climate target makes the interdependency explicit: failing to reach the 2030 target makes the 2040 target structurally harder to achieve, because the emissions trajectory in the intervening years determines how much work remains. If Germany and Italy are still running behind their 2030 targets in 2027, 2028, and 2029, the gap to 90% by 2040 becomes correspondingly larger, and the political cost of closing it becomes correspondingly harder to sell.
The Czech Republic, Slovakia, Poland, and Hungary voted against
That four member states voted against the 90% target at the March 5 Council meeting is worth recalling, not because they have a legal basis to resist it — the decision passed by reinforced qualified majority — but because it tells you something about the political coalition the Commission will need to hold together over the next fourteen years.
The four countries cited concerns about the economic and social impact on heavy industry, lower-income households, and farmers. These are not abstract objections. Heavy industry in Central and Eastern Europe operates on carbon profiles that are significantly more intensive than the EU average. Households in Poland and the Czech Republic spend a higher share of income on energy than households in Germany or France. The Effort Sharing Regulation distributes national targets partly on the basis of GDP per capita, meaning richer countries are expected to cut more in absolute terms — but the political cost of carbon policy is not evenly distributed within countries, and governments know it.
This is the tension that EU Green Week’s “economic reality” framing is trying to bridge. The argument is that nature-positive investment — rewilding, soil restoration, green urban infrastructure, sustainable agriculture — creates jobs, supports rural communities, and generates returns that justify the expenditure. That argument is probably correct in principle. The question is whether it translates into the kind of political durability that carries 27 governments through fourteen years of legally binding commitments, two or three election cycles, an active war on the continent’s eastern border, and whatever energy market disruptions the next decade produces.
The conference in Brussels this week will bring together policymakers, investors, farmers, and civil society. It will not resolve that question. But the fact that it is framing itself as “ambition meets reality” rather than “ambition” alone suggests that at least some people in the Commission understand where the pressure is coming from.
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