EU climate policy changes: some measures are being eased and postponed

A new interim climate target set for 2040

Last week, the EU Council agreed to partially amend the European Climate Law and introduce a binding interim target: by 2040, the EU must reduce net greenhouse gas emissions by 90% compared to 1990 levels.

A flexibility provision was included, allowing up to 5% of this reduction to be achieved through international carbon credit mechanisms. This means the actual domestic reduction could amount to around 85%.

The Council’s position also states that progress reviews will take place every two years, based on the latest scientific evidence, technological developments, and the EU’s competitiveness.

A step forward, but flexibility weakens the target

Further concern arises from the Council’s decision to postpone the launch of the EU Emissions Trading System 2 (ETS2) — for buildings and road transport — from 2027 to 2028.

The delay will impact climate fund revenues

Two major sectors will remain outside the emissions trading market for an additional year, slowing incentives to reduce emissions and temporarily lowering climate fund revenues.

Despite the delay, the Social Climate Plan is expected to start in 2026. The European Commission is considering measures that would allow Member States to use future ETS2 revenues in advance, in cooperation with the European Investment Bank.

Decisions still need approval from the European Parliament

These decisions must still be approved by the European Parliament, but the likelihood of rejection is low — far-right parties in the EP often vote with right-leaning groups when it comes to easing climate commitments.

🔍 Possible impact on Lithuania

Positive impact:
🔹 The introduction of an interim target encourages earlier progress, preventing key decisions from being postponed to the final years.

Negative consequences:
🔹 There may be increased pressure to temporarily roll back certain targets under the argument of protecting competitiveness.
🔹 Planned revenues for the Climate Change Programme in 2026 will decrease, potentially reducing state support measures, even if the European Investment Bank contributes to the Social Climate Plan.