The European Commission proposed an amendment to the EU Climate Law on 2 July introducing a binding target of a 90% net reduction in greenhouse gas emissions by 2040 compared with 1990 levels. Since then, progress has stalled.

EU environment ministers failed to reach consensus on the proposal during a meeting on 12 September, deferring the decision to the EU leaders’ summit scheduled for 23–24 October. On 18 September, the Environment Council adopted a “statement of intent” outlining a post-2030 Nationally Determined Contribution with a 2035 emissions-reduction range of 66.25–72.5% versus 1990 levels. The range aligns with existing legislation and the proposed 2040 goal but remains non-binding.

The European Parliament’s Environment Committee, reflecting political divisions, postponed its 23 September vote and is now waiting on further action from the Council. With both institutions reluctant to endorse the Commission’s proposal, the EU’s 2040 climate ambition is at a political impasse. The October leaders’ summit will be a key test, as unanimity will be required—a condition that raises the risk of delay or dilution. Denmark, which holds the Council presidency until December, is expected to defend the bloc’s climate objectives before passing leadership to Cyprus in January. The next trio of presidencies—Ireland, Lithuania and Greece through 2027—could steer EU priorities towards defence at the expense of climate policy.

The IEA U-turns

In September, Bloomberg reported that a leaked draft of an IEA study projected continued growth in global oil and gas demand over the next 25 years—a reversal from the agency’s previous tone. Soon after, the IEA released two reports reinforcing this shift.

The first, focused on hydrogen, indicated for the first time a decline in potential low-emissions hydrogen production capacity by 2030 based on announced projects, suggesting that momentum in the sector is falling. The second, examining oil and gas field decline rates, concluded that ongoing investment in hydrocarbons will be necessary to meet demand, as natural decline rates are accelerating globally. Nearly 90% of upstream spending is now used to offset production losses rather than expand capacity. Without new investment, global oil output would fall by about 5.5m b/d annually and gas output by around 270bcm/yr. Sustaining current production through 2050 would therefore require major new conventional projects, with implications for energy security, market stability and emissions trajectories.

Nearly 90% of upstream spending is now used to offset production losses rather than expand capacity

OPEC swiftly pointed out the irony, noting that the IEA’s own promotion of its Net Zero Emissions Scenario and forecasts of imminent peak oil demand had discouraged investment and created uncertainty about the sector’s future.

At the same time, New York Climate Week highlighted that the current phase of decarbonisation is increasingly driven by data, technology, AI and finance rather than by NGOs. The emphasis is shifting to tangible, capital-backed solutions. Even as political momentum appears to wane, the transition may accelerate, powered by scientific and financial forces, amid the sobering realities underscored by the IEA.

Europe’s winter risks

Meanwhile, Europe faces renewed risks ahead of the winter gas season. Russian gas exports to Europe fell to their lowest monthly level on record in June during maintenance on the TurkStream pipeline. With operations resuming on 17 June, exports are expected to stabilise within the range seen earlier in the year. Russian pipeline deliveries to the EU are forecast at 16bcm in 2025.

In June, the EU and the European Parliament agreed to allow a 10-percentage-point deviation from the bloc’s 90% gas-storage target ahead of the heating season, with the target assessed at EU level. Summer stockpiling has been slightly above average, enabling companies to meet the reduced minimum of 80%. However, with the new flexibility, firms largely avoided overfilling storage sites. On 2 September, Alexei Miller, the head of Russian state gas exporter Gazprom, warned that Europe was underestimating the challenge of replenishing its underground storage.

EU LNG send-out rose by 36% year-on-year during summer 2025, supported by China’s decision to divert some cargoes from its domestic market. With Russian pipeline flows still subdued and storage levels below last year’s, Europe appears set to rely once again on record LNG imports to meet winter demand.

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Author: Thierry Bros