Amendments to Regulation (EU) 2021/1119

Regulation (EU) 2021/1119 is amended as follows:

in Article 1, second paragraph, the following sentence is added:

‘This Regulation also sets out a binding Union target for 2040.’

in Article 4, paragraphs 3, 4 and 5 are replaced by the following:

‘3. In order to reach the climate-neutrality objective set out in Article 2(1), the binding Union 2040 climate target shall be a reduction of net greenhouse gas emissions (emissions after deduction of removals) by 90 % compared to 1990 levels by 2040.

4. With a view to the period after 2030, the Commission shall review relevant Union legislation in order to enable the achievement of the target set out in paragraph 3 of this Article and the climate-neutrality objective set out in Article 2(1) and consider taking the necessary measures as appropriate and based on detailed impact assessments, in accordance with the Treaties.

The Commission shall continue to strengthen the initiatives concerning the enabling framework and aim to accelerate their adoption and implementation to ensure that conditions are in place to support affected legal and natural persons, such as European industry and citizens, throughout the transition, towards the targets set out in paragraphs 1 and 3 of this Article, the climate-neutrality objective set out in Article 2(1) and a climate-neutral economy.

5. Within the framework of the review referred to in paragraph 4, first subparagraph, in order to facilitate the achievement of the target set out in paragraph 3, the Commission shall ensure that the following elements are appropriately reflected in the legislative proposals:

from 2036, an adequate contribution towards the 2040 climate target of high-quality international credits under Article 6 of the Paris Agreement of up to 5 % of 1990 Union net emissions, corresponding to a domestic reduction of net greenhouse gas emissions by 85 % compared to 1990 levels by 2040, in a way that is both ambitious and cost-efficient, supporting the Union and third countries in achieving net greenhouse gas reduction trajectories compatible with the Paris Agreement objective to hold the increase in the global average temperature to well below 2 o C and pursue efforts to limit the temperature increase to 1,5 o C above pre-industrial levels, ensuring the environmental integrity of those credits, while promoting the Union’s technological leadership; a pilot period from 2031 to 2035 to initiate a high-quality and high-integrity international credit market may be considered; the origin, quality criteria and other conditions concerning the acquisition and use of any such credits shall be regulated in Union law to ensure that they are based on credible and transformative activities in partner countries with the aim of achieving climate targets and policies compatible with the long-term temperature goal laid down in the Paris Agreement, that they are subject to robust safeguards, including ensuring integrity, avoidance of double counting, additionality, permanence, transparent governance, strong monitoring, reporting and verification methodologies, that they ensure economic, social and environmental co-benefits and human rights safeguards, and have a high ambition for the share of proceeds for adaptation and the sharing of mitigation benefits with countries concerned; when establishing the quality criteria, the Commission shall consider, where appropriate, complementing the criteria laid down under Article 6(4) of the Paris Agreement to ensure the respect of those safeguards and the highest quality of international credits, in particular with regard to permanence and human rights;

the role of domestic permanent removals under the system established by Directive 2003/87/EC of the European Parliament and of the Council ( *1 ) for greenhouse gas emission allowance trading within the Union (the “EU ETS”) to compensate for residual hard-to-abate emissions;

enhanced flexibility within and across sectors and instruments, to support the achievement of targets in a simple and cost-effective way;

the realistic contribution of carbon removals to the overall emission reduction effort, while taking into account the uncertainties of natural removals and ensuring that possible shortfalls would not be at the expense of other economic sectors, without prejudice to the possibility for Member States to use surplus natural removals to compensate for their emissions in other sectors;

the need to maintain, manage and enhance, as appropriate, natural sinks in the long term and protect and restore biodiversity, to promote sustainable and circular bioeconomy, and to take into account the effects of differences in forest age structure, natural variability and uncertainties, especially those linked to the impacts of climate change and natural disturbances in the land use, land-use change and forestry sector;

Member States’ post-2030 targets and efforts should reflect cost efficiency and solidarity, taking into account different national circumstances and specificities, including those of islands and outermost regions;

the best available and most recent scientific evidence, including the latest reports of the IPCC and the Advisory Board;

the social, economic and environmental impacts across Member States, including in relation to the objectives of decarbonisation and competitiveness for European industry;

the costs of inaction and the benefits of action over the mid-term to long-term;

the need to ensure and support a fair and just, pragmatic, cost-effective and socially balanced transition for all, taking into account different national circumstances and paying particular attention to impacts on consumer prices, energy poverty and transport poverty and to regions and sectors, including their investment capacity, small and medium-sized enterprises (SMEs), farmers and vulnerable households affected by the transition to climate neutrality;

simplification and reduction of administrative burden, technology neutrality, cost-effectiveness, economic efficiency and economic security;

climate action as a driver for investment, innovation and increased competitiveness;

the need to strengthen the resilience and global competitiveness of the Union’s economy and reduce the risk of carbon leakage, in particular for SMEs and industrial sectors that are most exposed to carbon leakage, including in relation to exports, so as to ensure fair competition;

best available cost-effective, safe and scalable technologies;

energy availability and affordability, security of supply, energy security and energy efficiency, including the “energy efficiency first” principle, as well as the strengthening of electricity grids and interconnections with a view to building a genuine Energy Union and promoting domestically produced energy;

the role of zero-, low carbon and renewable fuels in the decarbonisation of transport, including road transport beyond 2030 and concrete measures to assist manufacturers of heavy-duty vehicles to reach their targets, taking into account European content;

fairness and solidarity between and within Member States;

the need to ensure environmental effectiveness and progression over time, while also safeguarding social cohesion and ensuring food security and a just transition;

investment needs and opportunities, including access to public and private finance as well as support for innovation and access to innovative technologies across all Member States, taking into account geographical balance;

international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement and the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC), as well as the support of the Union to its partners in addressing climate change and its impacts.

( *1 ) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC ( OJ L 275, 25.10.2003, p. 32 , ELI: http://data.europa.eu/eli/dir/2003/87/oj ).’;"

in Article 4, the following paragraph is added:

‘8. From 6 March 2027 and every two years thereafter, the Commission shall assess and report on the implementation of the intermediate targets and decarbonisation trajectories set out in this Regulation, taking into account the latest scientific evidence, technological advances and evolving challenges to and opportunities for the Union’s global competitiveness. That assessment may be accompanied, where appropriate, by legislative proposals.’

in Article 11, first paragraph, the following points are added:

the evolving challenges to, and opportunities for, global competitiveness of European industries across Member States, in particular of energy-intensive industries and of SMEs;

the evolution of energy prices and its impact on European industries and households;

the socioeconomic impacts, including the effects on employment;

technological advances and deployment across Member States and sectors of innovative technologies;

the estimated level of net removals at Union level in relation to the targets set out in this Regulation; if the Commission finds that the estimated level of net natural removals for 2040 is significantly diverging from what would be required to achieve the 2040 intermediate target, including where that divergence is due to natural disturbances, the Commission shall propose, where appropriate, measures at Union level, including, if necessary, an adjustment of the 2040 intermediate target corresponding to, and within the limits of, the possible shortfalls, and ensure that possible shortfalls will not be at the expense of other economic sectors;

the progress towards the intermediate targets set out in this Regulation;

the flexibility for Member States to use high-quality international credits to fulfil up to 5 % of their post-2030 targets and efforts.’

in Article 11, the second paragraph is replaced by the following:

‘The Commission’s report shall be accompanied, where appropriate, by legislative proposals to revise this Regulation, including the intermediate 2040 target, and by additional measures to strengthen the initiatives concerning the enabling framework supporting the continued effective implementation of this Regulation, in line with Article 4(5), and securing Union competitiveness, prosperity and social cohesion.’.

REGULATION (EU) 2026/667 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 March 2026 amending Regulation (EU) 2021/1119 as regards the setting of a Union intermediate climate target for 2040