The European Commission has launched a public consultation to gather views on the EU’s intermediary climate target for 2040, setting a path from our already-agreed 2030 targets to net-zero emissions by 2050.

CLC welcomes the Commission’s consultation. It is necessary to strengthen the incentives of the operating environment for low-carbon investments in order to achieve carbon neutrality by 2050. In addition to an attractive operating environment, we must ensure our ability to meet the growing demand for low-carbon technologies and solutions.

Even if we reach carbon neutrality by 2050, we must also start preparing for significant removal of carbon dioxide, both nature-based and technical, from the atmosphere to avoid the worst consequences of climate change.

In this regard, CLC highlights the following key aspects that should be considered when formulating the 2040 climate target and the accompanying policies:


1. Accelerating climate action and enhancing competitiveness simultaneously

The EU must expedite its climate action and implement it in a manner that strengthens competitiveness and secures a prominent position in future markets. It is imperative to accelerate the pace of emission reductions after 2030. We see that frontloading target setting will effectively support technological development within the EU and enable it to meet the increasing global demand for low-carbon products and solutions in the future.

In line with our perspective, we recommend that the EU commits to an ambitious emissions reduction target of at least 85-90 %. By demonstrating strong commitment and decisive action, the EU can both address the urgency of climate change and enhance its competitive advantage on a global scale.


2. Integrating of climate and industrial policies deeply during coming decades

To accelerate European emission reductions and respond to the growing global demand for low-carbon technologies and solutions, closer integration of climate and industrial policies is essential. The promotion of low-carbon technologies is evident in both the US Inflation Reduction Act and China’s latest 5-year plan. While the European Commission’s Net Zero Industrial Act provides a solid foundation for integration, we advocate for even closer and broader integration of industrial and technology policy with climate and energy policy. This approach will help Europe maintain its climate leadership, expand its global influence, and create sustainable well-being for its citizens.


3. Guiding future mitigation actions with carbon pricing

The carbon price should serve as a guide for future mitigation actions also in the future. The EU Emission Trading System (EU ETS) has successfully created conditions where EU emissions have fallen even more than the set targets in a cost-effective manner.

We welcome the decisions made as part of the Fit for 55 package to extend the coverage of cap and trade beyond the current scheme. When formulating policies for 2040, we recommend exploring the possibilities of applying cap and trade to remaining greenhouse gas emissions outside these two systems and establishing solutions to link the EU ETS with other countries’ emission trading schemes. A more extensive system will generally lead to greater cost-effectiveness. However, alongside the carbon price, targeted policies such as Carbon Contracts for Differences and other demand-based policies are necessary to scale up key technologies.


4. Enhancing carbon removals – nature-based and technological

There is an urgent need to enhance carbon removals, both technical and nature-based, to avoid surpassing the 1.5°C target. However, both methods require a significant time frame before tangible results can be achieved. Technical sequestration is still in the developmental phase, while strengthening forest sinks, the primary contributor to nature-based sequestration, will take decades to be in full force.

We believe the EU should pay particular attention to these issues when designing policies for the 2040 climate target. The development of technical carbon capture requires enhanced resources and incentive frameworks. Regarding nature-based removals, addressing the challenges posed by climate change necessitates a more holistic approach. Furthermore, the policy planning horizon should extend beyond carbon neutrality to a time when the main goal for climate policy is to sequester carbon from the atmosphere. We have provided a detailed discussion on this matter in our position paper titled ‘The EU Needs a Holistic Land Use Plan to Enable Enhanced Carbon Sequestration.’

We recommend that the EU prepares a long-term strategy for land-use and nature-based carbon removals similar to the ‘Clean Planet for All’ document published in 2018.

5. Simple regulation to avoid policy overlaps

With its many objectives and policies, the European climate and energy policy framework is challenging, especially for many SME companies. In some cases, the policies created to achieve different objectives overlap and thus weaken the overall effectiveness of the policy. When creating new legislation, special attention should be paid to measures for different areas of climate and energy policy, so that overlapping does not weaken the effectiveness of the overall policy. 


Please read the full CLC background memo on the EU’s climate target for 2040 here.

For more information, please contact CLC Development Director, Systemic Climate Solutions, Juha Turkki (juha.turkki(a)