Recently, the Council of the European Union formally adopted the revised European Climate Law, stipulating that the net greenhouse gas emissions will be reduced by 90% by 2040 compared to the 1990 level.

The revised regulation will take effect 20 days after its publication in the Official Journal of the European Union and will be directly applicable to all EU member states. The European Commission will put forward relevant proposals to implement the binding EU 2040 climate target.

According to a press release issued by the Council of the European Union on the same day, to meet the newly established medium-term target, the EU must achieve at least an 85% emissions reduction from 1990 levels domestically, with the remaining 5 percentage points to be offset by "high-quality international carbon credit" from other countries starting in 2036. Such carbon credits must come from "credible greenhouse gas mitigation activities in partner countries" and be in line with the Paris Agreement.

The press release also states that the revised bill has postponed the full operational time of the EU Emissions Trading System (ETS), which covers sectors such as buildings and road transport, from 2027 to 2028.

The EU adopted the European Climate Law in 2021, setting targets to achieve climate neutrality by 2050 and reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. The European Commission formally tabled a revision in July last year, supplementing the 2040 interim target. Last December, the European Parliament and the Council of the European Union reached a provisional political agreement on the revised draft.