The European Commission’s Climate Action Progress Report, published November 9, records another year of falling EU emissions as clean energy gains ground, and the European Environment Agency’s supporting assessment puts the 2025 decline at 1.6 percent, taking net emissions to 39 percent below 1990 levels. The pace of reduction slowed compared with recent years.
Delivery, not direction, is now the question. On current policies the EU is projected to cut net emissions 48 percent by 2030. Adding every planned national measure lifts that to 54 percent, within reach of the legally binding 55 percent target in the European Climate Law, which also sets a 90 percent cut by 2040 and climate neutrality by 2050.
The sector split explains where capital has worked and where it has not. Energy supply emissions fell an estimated 1.2 percent in 2025 and industry fell 2.4 percent, while buildings rose 0.8 percent and domestic transport rose 0.3 percent. Renewables account for about 50 percent of energy production in the power sector, against 27 percent of gross final consumption in buildings and 12 percent in transport.
The land sink helped in 2025, with the net carbon sink under land use and forestry increasing by the equivalent of 25 million tonnes of carbon dioxide. For investors the read is straightforward: the power sector transition is largely financed and underway, and the binding constraint for the 2030 target is retrofit, heating and transport infrastructure that has attracted far less capital to date.