In an online media briefing held on 1 July, European climate policy experts and business leaders examined the political, technical and economic dimensions of the European Commission’s forthcoming 2040 climate target proposal, to be officially released on Wednesday. The panel included Neil Makaroff, Director of the Brussels-based think tank Strategic Perspectives; Jens Mattias Clausen, EU Division Director at Danish think tank Concito; and Ursula Woodburn, Director of CISL Europe and the Corporate Leaders Group Europe.

The Commission is expected to propose a 90% emissions reduction by 2040, a crucial move to update the European Climate Law and reaffirm the bloc’s green agenda at a time of mounting international scrutiny.

France sets conditions for supporting the target

French President Emmanuel Macron has laid out three conditions for endorsing the target: an ambitious industrial and trade policy, a robust EU investment plan, and technological neutrality, including recognition of nuclear power. “France already secured a first win with nuclear being included in the new state aid framework,” Makaroff points out.

Germany, Spain, Denmark, Sweden, Slovenia and Estonia have already expressed support for the 90% target, while France has yet to clarify whether it will enable or block consensus.

Denmark assumes leadership under tight political timeline

The Danish Presidency of the Council of the EU, which began on 1 July, has made adoption of the 2040 target and the new Nationally Determined Contribution (NDC) its top priority. The political deadline: 18 September.

According to Jens Mattias Clausen, “this will be a delicate political balancing act—negotiating a compromise package in very limited time with multiple national sensitivities in play.” He highlights that delays in tabling the Commission’s proposal have compounded the pressure and given reluctant Member States greater leverage.

Flexibilities must not undermine environmental integrity

One of the most contentious issues is the use of international carbon credits post-2036. “These must be tightly regulated. Without a robust system, we risk opening a Pandora’s box that could severely compromise the integrity of the EU Emissions Trading Scheme,” Clausen warns.

The Commission is expected to impose strict guardrails, though concerns remain over the quality, traceability and climate value of such credits. In parallel, sectoral flexibilities, including between agriculture, transport and land use, are also under discussion.

Business and investors demand long-term clarity

From the private sector, the message is clear: investment requires policy certainty. According to Ursula Woodburn, more than 150 companies and investors have signed an open letter in support of the 90% target.

“They need a predictable framework to mobilise capital, plan industrial transitions, and stay competitive in the global market,” Woodburn asserts. “Interest in the letter surged as soon as it was reopened. Delay is simply not a sound strategy.”

Electrification and decarbonisation as pillars of competitiveness

Woodburn warns that electrification demand is stagnating, which could undermine European industry. “The EU must provide access to clean, secure and affordable electricity. We can’t continue to pay massive sums for fossil fuel imports from unstable partners,” she states.

Additionally, net-zero investment in Europe has declined for the first time in five years, according to figures from the Institute for Climate Economics. Makaroff cautions: “That’s alarming—it underlines the need for the 2040 target to come with a strong investment plan.”

In France, for instance, more manufacturing sites were opened in 2024 due to the net-zero transition than for defence or food sectors, showing the tangible economic value of the climate agenda.

EU climate leadership and credibility at stake

Failing to deliver a strong target or credible NDC would undermine the EU’s global position. “If we show up with a weak or incoherent contribution, we not only lose climate leadership, but also damage our multilateral credibility,” Clausen warns.

The worst-case scenario would be to interpolate between the 2030 and 2050 targets, leading to only a 66% reduction by 2035—lower than business-as-usual projections. “That would be a major step back, especially on the 10th anniversary of the Paris Agreement,” he notes.

With the US pulling back from Paris commitments, all eyes are now on the EU and China. “If the EU fails, there won’t be sufficient pressure for China to scale up its own ambitions,” Makaroff stresses.

Strategic clarity for Europe’s industrial future

“The 90% target is not a luxury—it’s a strategic planning tool,” Makaroff emphasises. Clausen adds: “We need a solid governance architecture, clear methodologies, and a long-term vision. Only then can Europe reindustrialise, stay globally competitive and fulfil its responsibility in the climate crisis.”