CLG Europe updated its position on the 2040 climate target. This position builds on the Commission proposal for amendments on the climate law, new research, and the business momentum calling for a robust target. It comes in the run up of key political discussions at the European Council and EU Parliament.
On 2 July 2025, the European Commission proposed an amendment to the European Climate Law to set a 2040 climate target of at least a 90% net reduction in greenhouse gas (GHG) emissions compared to 1990 levels. CLG Europe had submitted a response to the public consultation prior to the release of the proposal.
Heads of States and government are currently expected to discuss the enabling conditions for the target at the October Council with an approval of Environment Ministers scheduled for 4 November. At the European Parliament, MEPs are discussing the target with votes expected in November.
CLG Europe’s updated position is part of broader widespread support from hundreds business and investors from across Europe for a robust target that will increase the EU’s competitiveness and energy security. (see Annex below).
Ahead of crucial political discussions, CLG Europe calls for:
- A swift adoption of a greenhouse gas emissions reduction of at least 90% by 2040 and a 2035 NDC of at least 72.5%. The target will be key to provide directionality as businesses have a limited number of investment cycles for major projects before 2040. These investments will drive European industrial leadership on clean technologies and products. A 90% target will provide clarity to businesses to scale up the development of business models that will unlock the economic benefits of near-term action.
- Decarbonisation yields competitiveness benefits. To meet these benefits, there must be coherence between the implementation of the CID and the 90% target. Coherence between the Clean Industrial Deal and the 2040 target is essential to guide industrial transformation, create markets for carbon-neutral materials, and scale deployment of clean energy.
- Investments in clean and energy efficient technologies are already taking place within the EU. Priority must be given to decarbonisation at EU level in order to stimulate these investments and roll out clean technologies
- The 3% use of international carbon credits should be on top of the 90% target. Credits must be consistent with principles of high quality, additionality, fairness and equity and come into force no earlier than 2036. Their use should be linked to evidence of an ongoing reduction-focused decarbonisation trajectory. Clarity must be given on the amount of credits expected to account for this 3%
- Set three separate targets to improve transparency and accountability by making the assumed permanent carbon removal reliance explicit: a net target, a target for nature-based carbon removals and a target for technological removals.
- Sectoral flexibilities should not deter sectors, including carbon intensive sectors, to decarbonise. Policies should support sectors to take action and reap economic benefits inherent to decarbonisation. Otherwise, EU industry risks falling behind international competitors which have embraced decarbonisation and clean technologies as means to increase their competitive edge.
- The achievement of the 2040 climate target strongly depends on the successful implementation of the Fit for 55 Package. Policies will need to create the enabling conditions to encourage early action, adoption of existing low carbon technologies and innovation.
- Digital technologies, including AI, can significantly contribute to the achievement of the EUs climate goals including the 2040 climate target. The policy framework should bring together the twin digital and green transition by providing the necessary incentives to facilitate investment in cost-effective digital climate solutions and technology infrastructure.
- Accelerate electrification and phase out fossil fuels, committing to reach 100% decarbonised power systems by 2035. Placing an emphasis on energy efficiency will also help to prioritise the most efficient, cost-effective solutions.
- Leading businesses are increasingly aware that nature restoration and sustainable land use will play a key role in increasing the EU’s ability to mitigate climate change through nature-based solutions. Nature based solutions can also improve resilience and adaptation to climate change. The 2040 climate target should create a clear signal to businesses and national governments that nature-based initiatives are integral to the EU’s climate and growth ambitions.
- The EU should harness the opportunities presented by the circular economy and eco-design to tackle emissions stemming from the production of materials.
This position builds on the CLG Europe 2023 position paper.
We stand ready to work with the Commission on the target and implementation framework to achieve it.
Annex
More than 150 companies and investors - worth more than €5 trillion and managing €65 trillion in assets - signed a letter backing a 90% climate target by 2040. Signatories include Allianz, Unilever, Iberdrola, Energie de France, Schneider Electric, Interface, Kingspan, Triodos Bank and many more. Together they employ more than 2 million people across Europe.
This letter also illustrates the business and investor momentum for across Europe for a robust target.
Business and investor support at national level includes:
Germany
In Germany, signatories include Allianz, Henkel, Otto Group, and SAP, while global businesses like Siemens and Deutsche Telekom are also scaling action domestically in parallel. More than 650 German companies have committed to science-based targets, and 17 are members of RE100. According to WMBC polling, 98% of German executives support a shift to renewable power, with 71% wanting it by 2035 or sooner. Projects like the €4.6 billion Power4Steel investment in Saarland show how a strong EU 2040 target underpins competitiveness and jobs.
France
In France, signatories of the letter include EDF, Schneider Electric, Danone and La Banque Postale. More recently, over 150 CEOs including EDF, ENGIE, Véolia, Orange, Fnac Darty, Suez, Enedis, Groupama and MAIF signed the declaration N’ayons pas peur! (“Let’s not be afraid”), warning that weakening the 2040 goal would erode sovereignty, undermine industrial strategy and weaken investment. Moreover, more than 500 French companies have committed to the Science Based Targets initiative, and 15 are members of RE100. French businesses are also investing in the transition, with projects like GravitHy’s €2.2 billion green steel plant in Fos-sur-Mer and Alstom’s partnership with SSAB to build trains from fossil-free steel.
Italy
In Italy, signatories include Nexi and Danieli Group, alongside multinationals with major operations such as Ingka IKEA, H&M, Inditex, Henkel, and Heineken. Over 250 Italian companies have committed to science-based targets, and several (including Enel, Intesa Sanpaolo, and Prysmian) are RE100 or EV100 members. Italian industry is also investing in the clean transition, for example, Danieli’s role in building Europe’s new green steel capacity, showing that setting robust EU targets is critical for competitiveness and jobs.
Spain
In Spain, signatories of the letter include Inditex, Iberdrola, and Acciona, and the Grupo Español de Crecimiento Verde, which represents over 65% of the IBEX35; joined by other major companies such as Cellnex and Meliá Hotels through the global Fossil to Clean campaign. Over 200 Spanish companies have committed to science-based targets, and six are members of RE100. Spanish businesses are leading large-scale investments, such as Hydnum Steel’s €1.65 billion green steel plant and Iberdrola’s grid-scale battery projects, showing how robust EU climate targets support growth and employment..
Netherlands
In the Netherlands, signatories include Ingka Group (IKEA), Heineken, and Signify, joined by Philips and Corbion via the global Fossil to Clean campaign. More than 300 Dutch companies have committed to science-based targets, and 10 are members of RE100. Dutch companies are also investing in breakthrough technologies, from Tata Steel Nederland’s green steel transformation in IJmuiden to zero-carbon cement production in Amsterdam, reinforcing the case for a robust EU 2040 target.
Poland
In Poland, signatories include Leroy Merlin Polska, while international companies such as Holcim and Equinor are also investing in the transition in the country. Over 40 Polish companies have committed to science-based targets, and WMBC polling shows that 89% of Polish executives support a rapid move to renewables, with 63% calling for coal to be phased out within ten years. Flagship projects like Holcim’s Go4ECOPlanet net-zero cement plant and the €6.4 billion Baltic offshore wind farms illustrate this shift in action.
Finland
In Finland, signatories include Fortum, Paulig, Elo Mutual Insurance Company, and Nordea Asset Management, while other companies are also engaging the global Fossil to Clean campaign. More than 170 Finnish companies have committed to science-based targets, and leaders like Nokia and Vaisala are RE100 members. Finnish firms are investing in next-generation technologies such as green hydrogen, e-fuels, and heavy-duty EV charging hubs, demonstrating the competitiveness benefits of robust EU targets.
Sweden
In Sweden, signatories of the letter include Vattenfall, H&M Group, JM AB, Polestar, SSAB and the AP funds (AP2, AP3, AP7).
More recently, Nordic utilities Vattenfall, Ørsted, Statkraft and Fortum, the Haga Initiative alongside the Swedish business community have all urged the national governments and EU to hold firm on 2040 target and NDC.
More than 450 Swedish companies have committed to science-based targets, and three are members of RE100. Companies are pioneering projects such as Vattenfall and CemVision’s near-zero emission cement and GreenIron’s fossil-free iron production, demonstrating that all sectors can and must contribute to the 2040 target.
Portugal
In Portugal, signatories include EDP and Sustain Azores, with EDP also part of the global Fossil to Clean campaign. Around 50 Portuguese companies have committed to science-based targets, including REN and Super Bock. Portuguese firms are turning ambition into action through projects like EDP’s WindFloat Atlantic offshore wind farm and the Mangualde Renewable Methanol project, highlighting the economic opportunities of a robust EU 2040 target.