EU Proposes Slashing Emissions Reduction Rate by Over 60%, Leaving Gap to 2040 Climate Target

On July 17, 2026, the European Commission proposed cutting the ETS annual emissions reduction rate to 1.7% after 2036 — down from the scheduled 4.4%. That is less than 39% of the prior pace. The EU's legally binding 2040 target requires 90% emissions cuts from 1990 levels. The Commission has not explained how it will close the resulting gap.