European Union member states are negotiating a compromise proposal aimed at giving industries more flexibility in meeting the bloc’s ambitious 2040 climate goals following concerns raised by several governments over the economic costs and impacts of transitioning to clean energy.

According to Reuters, the EU is preparing a legally binding target to cut net greenhouse gas emissions by 90 percent by 2040. The goal is expected to be finalized before world leaders convene for the COP30 United Nations Climate Conference on November 6, 2025.

However, months of discussions have yet to reach consensus, as some member states warn that overly aggressive green policies could strain industries and citizens, especially amid rising defense budgets and ongoing post-pandemic economic recovery efforts.

Under a compromise drafted by Denmark, which currently holds the EU’s rotating presidency, the 2040 emissions target would be reviewed every two years. This mechanism allows adjustments or relaxations depending on economic conditions and technological advancements.

The draft also stipulates that if forests absorb less carbon than projected, or CO₂ removal technologies advance more slowly than expected, other sectors will not be forced to compensate for the shortfall.

“Potential shortfalls in one sector should not become a burden for others,” the document, dated October 25, 2025, states.

The proposal keeps the 90 percent reduction target intact, as well as a 3 percent allowance for achieving the goal through overseas carbon credit purchases, although countries such as France have suggested increasing this share to 5 percent.

Climate ambition vs industrial competitiveness

EU authorities are working to protect domestic industries facing pressure from cheap imports from China and high tariffs from the United States. To ease resistance from some member states, the European Commission has promised adjustments to other green policies, including carbon pricing for transport fuels − a demand highlighted by Poland and the Czech Republic.

Brussels is also reportedly considering relaxing the ban on sales of combustion-engine vehicles set for 2035, following pressure from Germany and Italy, which warn that strict regulations could threaten their domestic automotive industries.

EU ambassadors are scheduled to continue discussions on the proposal next week, ahead of a final decision by climate ministers on November 4, 2025.