Carbon Reduction Activities in Europe: February 2026
Executive Summary: The European Union has set ambitious carbon reduction targets, aiming for a 90% reduction in greenhouse gas emissions by 2040 compared to 1990 levels. This includes the introduction of international carbon credits to aid in achieving these goals. Additionally, the EU Emissions Trading System (ETS) is under review, with discussions on potential revisions to enhance its effectiveness.
Introduction
Between February 16 and February 22, 2026, several significant developments in carbon reduction activities were announced in Europe. These initiatives are part of the European Union’s broader strategy to combat climate change and achieve climate neutrality by 2050. This report provides a detailed overview of these activities, highlighting key announcements and their implications for the EU’s climate policy.
EU’s 2040 Climate Target
The European Union has set a legally binding target to reduce net greenhouse gas emissions by 90% by 2040, compared to 1990 levels. This ambitious goal is part of the EU’s commitment to achieving climate neutrality by 2050. The new target allows for the use of international carbon credits, which can contribute up to 5% of the emissions reductions from 2036 onwards. These credits must come from partner countries with climate policies compatible with the Paris Agreement. (Source)
Introduction of International Carbon Credits
The European Commission has proposed the inclusion of international carbon credits as part of its strategy to meet the 2040 climate target. This marks a shift in the EU’s climate strategy, allowing up to 3% of the emissions reduction to be achieved through high-quality international carbon credits starting in 2036. This approach aims to balance domestic emission reductions with global cooperation, providing economic and technical flexibility for industries. (Source)
Review of the EU Emissions Trading System (ETS)
The EU Emissions Trading System (ETS) is undergoing a review, with discussions on potential revisions to enhance its effectiveness. Carbon prices in Europe have fallen in February 2026, influenced by political comments and market dynamics. German Chancellor Friedrich Merz’s remarks on the potential revision or postponement of the ETS contributed to market uncertainty, although he later retracted his statement. The review may include slowing down the phase-out of free allowances for industries starting in 2029. (Source)
Conclusion
The announcements made between February 16 and February 22, 2026, reflect the European Union’s commitment to ambitious climate action. The introduction of international carbon credits and the review of the ETS are key components of the EU’s strategy to achieve its 2040 climate target. These initiatives highlight the EU’s role as a global leader in climate policy, while also addressing the need for flexibility and cooperation in achieving its goals.
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