EU emissions down 1.6% in 2025, ETS revenues hit €43.2B as clean energy expands

The European Commission's 2026 Climate Action Progress Report shows EU net greenhouse gas emissions fell 1.6% in 2025, putting them 39% below 1990 levels while the economy grew 74%. Emissions covered by the EU ETS dropped about 2%, and ETS revenues rose 11% to €43.2 billion, with more than half going directly to member states for decarbonisation investments. Wind and solar now account for 49% of electricity generation capacity, and heat pump installations jumped to 41 GW in 2025. But the report also flags implementation gaps. Effort Sharing Regulation sectors are projected to cut emissions only 38.5% by 2030, short of the 40% target, and nine member states must submit corrective action plans. The land sector faces a 40-55 million tonne CO2e gap toward its 2030 target. Aviation emissions grew 0.2%, underscoring the need for faster decarbonisation there. With a proposed ETS reform for 2030-2040 and a new Climate Resilience Law on the table, the EU is pushing to accelerate the transition, but the slower pace of reductions in 2025 shows how much work remains.