Europe’s 2040 Climate Plan Threatens Innovation, Says Climate KIC
Climate KIC has cautioned that the European Union’s newly approved 2040 climate target, updated Nationally Determined Contributions (NDCs), and Omnibus deregulation package could weaken Europe’s transition to a sustainable, climate-resilient economy. The warning comes as COP30 reaches its mid-point in Belem, Brazil.
Speaking from the summit, Climate KIC CEO Kirsten Dunlop said that the EU’s measures risk eroding accountability frameworks and sending conflicting signals to industry. This, she warned, could create uncertainty for the more than 6,000 climate startups that Climate KIC has helped scale across Europe.
“At Climate KIC, we believe that real change happens on the ground. Cities, regions, leading businesses and innovation ecosystems are already driving momentum,” Ms Dunlop said. “But the EU’s new 2040 target and Omnibus vote threaten to undermine this work just as it is scaling.”
The Omnibus package has been criticised for weakening due diligence requirements, reducing reporting obligations, and signalling that accountability is optional. Meanwhile, the new 2040 target allows for domestic carbon removals in the European Union Emissions Trading Scheme and permits up to 5% of emissions to be offset internationally, which Climate KIC warns could reduce incentives to decarbonise industry and adopt existing solutions.
According to Carbon Market Watch, the offset provision could increase emissions by up to 50% and cost EU taxpayers as much as €48.9 billion, delaying the continent’s transition while allowing polluters to pay their way out of reductions.
“Europe risks stepping back just as global competitors accelerate,” Ms Dunlop said. “If action is not strengthened, economies and businesses will be less resilient, leading to job losses, weakened competitiveness, and greater vulnerability to economic shocks.”
Climate KIC emphasised that innovations from circular production to new financial flows and local leadership are ready to scale and can drive sustainable prosperity, but only if Europe maintains a strong regulatory and investment framework.
The statement also highlighted the importance of NDCs as investment prospectuses, warning that political uncertainty in Europe could undermine investor confidence at a critical moment for climate innovation.
