EU emissions continue to fall as clean energy gains ground

The European Commission has published the EU Climate Action Progress Report for 2026 and the Carbon Market Report, which show that the EU’s greenhouse gas (GHG) emissions continue to fall, clean technologies are expanding, and EU Member States have an increasing amount of ETS revenue to invest in decarbonisation. These developments demonstrate how the transition to clean energy continues to support the EU’s broader objectives of strengthening competitiveness, improving energy security, reducing dependencies and achieving climate resilience.

The Climate Action Progress Report confirms that the EU’s net GHG emissions fell by 1.6 per cent in 2025 compared with 2024, according to provisional data. Emissions covered by the EU Emissions Trading System (EU ETS) fell by around 2 per cent in 2025, whilst emissions in the sectors covered by the Effort Sharing Regulation (ESR) remained broadly stable, and provisional data show an improvement in the EU’s terrestrial carbon sink. Emissions are now 39 per cent below 1990 levels, whilst the EU economy has grown by 74 per cent over the same period, decoupling our economic growth from its decarbonisation for yet another year, thereby further reducing emissions. This year’s Carbon Market Report also notes that EU ETS revenues rose to €43.2 billion in 2025, an increase of 11 per cent compared with 2024.

This year, the EU also strengthened its long-term climate framework by setting a legally binding target to reduce net GHG emissions by 90 per cent by 2040 compared with 1990 levels, with the amendedEuropean Climate Law coming into force in April 2026.

Stepping up the implementation of the 2030 initiative across the EU.

Whilst the EU remains firmly committed to reducing net GHG emissions by at least 55 per cent by 2030, the slower pace of emissions reductions in 2025 means that efforts across the economy will need to be stepped up during the second half of the decade.

The report indicates that emissions covered by the Effort Sharing Regulation (including domestic transport, construction, agriculture and waste) are projected to fall by around 38.5 per cent by 2030 compared with 2005, slightly below the 40 per cent target set for the EU as a whole. The assessment shows that nine EU Member States are not making sufficient progress towards meeting their 2030 environmental effort reduction targets. The Commission will ask Austria, Croatia, Cyprus, Germany, Italy, Ireland, Lithuania, Malta and Sweden to submit a corrective action plan to accelerate the implementation and development of measures and investments to reduce emissions.

Provisional data show that net carbon removals from the land sector increased by around 11 per cent in 2025 compared with 2024. Despite this improvement, current projections for the land sector also indicate a shortfall of between 40 and 55 million tonnes of CO₂ equivalent against the EU’s 2030 land use target.

The clean transition strengthens energy security and competitiveness.

The accelerated roll-out of clean technologies in 2025 continues to help reduce Europe’s dependence on imported fossil fuels and to limit the impact of fuel price volatility on citizens and businesses. Whilst the manufacture of clean technologies in the EU has expanded significantly, the report highlights that there are still economic opportunities for European industry, which will, in turn, mobilise investment. Registrations of battery electric cars rose to 1.9 million in 2025, accounting for approximately one in six new car registrations. The EU’s wind and solar capacity rose to 611 GW, or around 49 per cent of total electricity generation capacity. The installation of heat pumps also accelerated, with an estimated additional 41 GW of capacity installed in 2025, compared with 26 GW in 2024.

Climate resilience is becoming increasingly urgent.

Climate-related extreme events have caused estimated economic losses of €822,000 million in the EU since 1980. Around €70,000 million per year will need to be invested in adaptation until 2050. The reports highlight the rapid increase in the impacts of climate change, with serious consequences expected by 2026.

The new EU Climate Resilience Framework, presented in October 2026, will strengthen Europe’s capacity to anticipate, prepare for and manage climate risks through a proposed Climate Resilience Act based on a common reference pathway for global warming.

The EU ETS remains a well-functioning carbon market.

The 2026 Carbon Market Report shows that revenue from the EU ETS totalled €43.2 billion in 2025. More than half of this amount (€23.9 billion) was channelled directly to EU Member States to fund decarbonisation measures for households and industry. Increasing the proportion of EU ETS revenue invested in decarbonisation and maintaining the integrity of the system will ensure that the EU ETS meets its 2030 target of reducing emissions by 62 per cent compared with 2005 levels.

Emissions from industrial installations fell by 3.3 per cent since 2024, driven mainly by the steel, cement and chemical sectors. Emissions from maritime transport fell by 4 per cent, whilst those from aviation rose by 0.2 per cent, confirming the urgent need to decarbonise this sector. Whilst total emissions under the EU ETS remain below the cap, the rate of emission reduction has slowed compared with previous years. In July 2026, the Commission proposed a reform of the EU ETS for the period 2030–2040.

 

More information: European Commission