The European Union’s crucial 2040 climate target is one step closer to formal adoption after MEPs approved proposed revisions to the framework on 10 February. The 2040 target sits between the two main targets of the European Green Deal: the 2030 goal of cutting net greenhouse gas emissions by 55 per cent compared to 1990 levels, and the EU’s ultimate aim of achieving climate neutrality by 2050.

At first glance, the 2040 target may therefore seem like a less significant technical waypoint, but the opposite is true. The 2030 target can still be met by picking off some low-hanging fruit (especially power sector decarbonisation), and 2050 remains distant enough to spare vested interests real pain. The intermediate phase of the 2040 target is where deeply political choices have to be made – just as climate policy faces increasing resistance from within the EU, as well as mounting geopolitical pressure from the US to roll back decarbonisation in Washington’s attempt to assert fossil-fuel dominance over Europe.

The amended package sets a net reduction aim of 90 per cent by 2040 compared to 1990 levels. This figure still falls within the lower range of the 90-95 per cent reduction that the European Scientific Advisory Board on Climate Change initially called for, giving the impression that the EU has actually decided to “stay the course” on its climate goals. But what is presented as continued ambition is, in practice, a dilution of Europe’s climate agenda behind a façade of headline goals. While the Advisory Board had called for domestic emission cuts, the final target offers the so-called “flexibility” to achieve 5 per cent emission reduction through international carbon credits, bringing down the required domestic effort to just 85 per cent.

Carbon crediting refers to the trading of certificates which represent a single tonne of CO2 (or another greenhouse gas) emissions that have been avoided or removed, allowing the buyers of such credits to claim they have compensated (or “offset”) their own emissions by financing reductions or removals elsewhere. This is deeply troubling: carbon crediting mechanisms have been found to deliver less than a fifth of the emission reductions they had promised in the past. In addition, their use shifts emission reduction efforts away from Europe to countries that have historically contributed far less to the climate crisis.

The controversial role of carbon removal

While most critical attention has focused on the role of international carbon credits, another major loophole has received far less scrutiny: the anticipated role of permanent carbon dioxide removal (CDR) in the 2040 target and its potential to undermine domestic mitigation efforts even further. CDR – once dismissed as risky geoengineering – has slipped into the mainstream of climate policy, including in the EU. The  Intergovernmental Panel on Climate Change defines CDR as “anthropogenic activities removing CO2 from the atmosphere and durably storing it in geological, terrestrial, or ocean reservoirs, or in products”. Climate change mitigation models cast it as indispensable to limit warming to 1.5 or 2 degrees Celsius: CDR is supposed to compensate residual emissions and, through net-negative emissions in the second half of this century, to bring temperatures back down after an overshoot of these targets – a scenario that is now widely considered inevitable.

Carbon sinks – above all forests – have played a prominent, and often controversial, role since the early days of international climate policy, not least because they were promoted by countries with powerful fossil industries as an alternative to cutting fossil emissions. In recent years, however, attention has shifted to so-called novel, more durable forms of CDR like BECCS (burning biomass to produce energy while capturing and storing the released CO2) and DACCS (removing CO2 directly from the air). One reason for this shift is that the capacity of forests to absorb CO2 is increasingly undermined by climate change itself, as well as by overharvesting. Second, there is increasing emphasis on long-lasting, “near-permanent” storage. CO2 emissions from burning fossil fuels persist in the atmosphere for centuries, and there is a growing recognition that they must be matched with equally durable, near-permanent storage. While trees may release their stored carbon within a few decades (e.g., because they die and decompose, burn in wildfires, or are harvested), CO2 captured and stored underground is designed to remain there far longer – provided leakage from storage is avoided.

The EU began to seriously consider CDR in its 2018 long-term climate strategy, A Clean Planet for All, which formed the basis for the European Green Deal announced the following year. Since then, it has adopted a certification framework for carbon removal and channelled funding into DACCS, BECCS, and CO2 storage infrastructure through the Innovation Fund. In the United States, the Biden administration began heavily subsidising DACCS through the 45Q tax credit, a policy largely retained under Trump.

With the current design of the 2040 target, a major opportunity to establish a concrete guardrail has been missed.

All this is unfolding against the backdrop of persistent uncertainty about whether BECCS and DACCS can be scaled to the levels assumed in models. Deploying BECCS at that scale would require large chunks of land, much of it currently used for agriculture. Models assuming such extensive deployment appear driven by (implicit) assumptions of “available locations” – i.e., “empty lands” –  in the Global South that ignore existing ground-level land-use practices, and could pose threats to biodiversity and food security. DACCS, meanwhile, is immensely energy-intensive and continues to fall short of promised technological advances and cost reductions.

Despite these uncertainties and constraints, the promise of large-scale CDR carries a fundamental risk of mitigation deterrence – that is, delayed or reduced direct emission cuts due to the expectation that removals can do the work. Mitigation deterrence is based on the flawed assumption that reductions and removals are equivalent and thus interchangeable, creating a false sense of security that can slow urgent climate action. This assumption of interchangeability rests on carbon-accounting practices that treat every tonne of CO2 as the same, even though carbon removals vary widely in permanence and can have very different environmental and social impacts than direct emission cuts. Delaying near-term emission cuts in anticipation of future large-scale removal remains risky even if these expectations materialise in the long term, as higher interim CO2 concentrations in the atmosphere could trigger irreversible climate effects.

EU policymakers seem to be generally aware of these risks, frequently emphasising in Commission documents that emission reductions must remain the priority. Still, concrete safeguards to prevent overreliance on uncertain CDR technologies remain weak. With the current design of the 2040 target, a major opportunity to establish a concrete guardrail has been missed.

A key lever to limit mitigation deterrence

A central proposal to limit mitigation deterrence is to introduce separate targets for emissions reductions and carbon removals. The idea is straightforward: under a single net target, expectations of future CDR can too easily be used to justify slower near-term emission cuts. Net zero or climate neutrality targets typically do not specify how much gross emissions remain and how much carbon must be removed. In theory, net zero could be achieved even with persistently high emissions, provided they are all fully counterbalanced by CDR. This is, of course, highly implausible, but the target design itself fails to give any meaningful indication of how far emissions actually need to decline.

Separate targets, by contrast, specify to what extent emissions have to fall and CDR has to be scaled, limiting fungibility between emission reductions and CDR and ensuring that removals complement rather than substitute emission cuts. This sends an important political signal: separate targets make explicit that emission reductions are non-negotiable in the near term, counteracting the impression that future removals offer a license to postpone emission-reduction efforts today.

The politics of target separation

Mitigation deterrence is not just a theoretical risk – it can also be embedded in policymaking itself. In our research, we examined whether the idea of separating emission reduction and removal targets was taken seriously in the EU’s 2040 process, which actors supported or opposed it, and how different economic sectors with diverging interests towards climate change mitigation positioned themselves.

Notably, the idea of separate targets, initially advanced by a joint effort by NGOs, scientists, and other actors, figured prominently in the early stages of policy development. The European Commission explicitly asked stakeholders whether they preferred a net target or separate targets for emission reduction and removals. Evidence from the EU consultation process shows that support for separate targets was remarkably broad. A clear majority of stakeholders – including NGOs, research organisations, several member state authorities, and many business associations – endorsed target separation, though for different reasons.

A fine-grained look at sectoral positions suggests that support for or opposition to target separation maps closely onto underlying political-economic interests. Among the minority of actors advocating a net 2040 target – which represents only 21.2 per cent of all respondents – business entities are overwhelmingly dominant: they account for 81.2 per cent of all net-target supporters. This coalition is led by fossil fuel companies, energy-intensive industries, and the chemical sector. These actors justify their stance with cost-effectiveness arguments and link a net target to calls for integrating CDR into the EU Emission Trading Scheme (ETS), which would provide compliance flexibility for hard-to-abate process emissions.

In contrast, the coalition supporting target separation – backed by the majority of business actors and most non-industry stakeholders – comprises a very diverse set of sectors. CDR developers and start-ups see a dedicated removal target as a crucial market-creating signal for scaling investment. They are joined by biomass industries, parts of the cement sector, and several renewable and low-carbon utilities, for whom separation could prove helpful in protecting the value of their decarbonisation investments.

Even within carbon-intensive sectors, preferences diverge: a notable number of utilities and even some fossil actors (like BP) support separation. The result is an unusual coalition ranging from environmental NGOs to CDR providers and certain energy companies that converges on the need to distinguish reductions from removals through separate targets, even as their underlying motivations differ substantially.

Despite a clear majority of stakeholders favouring target separation, the European Commission chose not to propose a separate target in its 2040 communication. Our evidence points to three main reasons: a political drive to simplify climate governance and reduce regulatory burdens; concerns about industrial competitiveness amid energy-price shocks and global subsidy competition; and a preference for maintaining flexibility within a single net target to preserve political support for ambitious headline goals. In practice, however, appeals to flexibility and competitiveness end up weakening the emission reduction ambition established with the 2040 target. This amplifies precisely the mitigation deterrence risks that separate targets are meant to prevent.

A fine-grained look at sectoral positions suggests that support for or opposition to target separation maps closely onto underlying political-economic interests.

Of course, separate targets are not a cure-all. Mitigation deterrence arises from deep-seated structural forces in fossil-fuel-dependent economies and cannot be contained simply through political signalling effects alone. But despite these limitations, separating reduction and removal targets could be an effective guardrail – a necessary but not sufficient element to limit fungibility, reduce the risk of delayed action, and prioritise real emission cuts.

The next, and arguably most decisive, step in integrating CDR into EU climate policy will be its inclusion in the EU ETS, a move announced in the final negotiations of the 2040 target. To be clear, some amount of permanent CDR will be necessary to compensate emissions which are genuinely hard to abate – especially from industrial processes and agriculture. However, allowing the market to determine which major large emitters may counterbalance their emissions through CDR – simply on the basis of who is willing and able to pay the highest price – would bake mitigation deterrence from CDR into the very architecture of the EU Emission Trading Scheme. In the worst case, foreseeably scarce CDR capacity would serve to compensate for emissions from the oil and gas industry instead of being allocated to economic activities that are impossible or very hard to decarbonise.

Given the profound uncertainties of novel, permanent CDR like BECCS or DACCS, climate policy should minimise reliance on them – setting cautiously defined, separate removal targets that reflect technological uncertainty, alongside explicit political decisions about which emissions are truly hard to abate.