The European Commission will ask Cyprus to submit a corrective plan within three months to accelerate emissions cuts, after finding that the country is not making sufficient progress towards its legally binding obligations under the EU Effort Sharing Regulation (ESR).
According to the Commission’s 2026 Climate Action Progress Report, Cyprus is expected to exceed its permitted emissions limits in both compliance periods, 2021–2025 and 2026–2030, even if it makes full use of the flexibility mechanisms available under the regulation.
Croatia and Italy are also projected to exceed their limits during the first period. For the second period, Cyprus is among eight countries facing a similar risk, alongside Austria, Germany, Italy, Malta, Ireland, Lithuania and Sweden.
Nine EU countries face corrective action
The Commission estimates that the EU as a whole will have a surplus of around 140 million tonnes of emissions allowances, enough to cover the projected shortfalls of the nine countries.
However, no transfers of allowances between member states have been reported. The Commission therefore considers that Austria, Croatia, Cyprus, Germany, Italy, Ireland, Lithuania, Malta and Sweden are not making sufficient progress.
It will ask all nine to prepare corrective national plans under Article 8 of the Effort Sharing Regulation.
Speaking to journalists, Commission climate spokesperson Anna-Kaisa Itkonen said Climate Commissioner Wopke Hoekstra would soon send letters to the countries concerned, requesting that they submit their plans within three months of the date of the letters.
The Commission will then issue an opinion on the credibility of each plan within four months of receiving it.
Compliance checks will take place in two stages: in 2027 for the 2021–2025 period and in 2032 for the 2026–2030 period.
Asked whether the process could lead to infringement proceedings, Itkonen said these remained an available option but were not the Commission’s first step or priority. Its immediate aim was to ensure that member states understand their obligations and can implement them.
Cyprus has not reported how it used ETS revenues
The report also highlights that Cyprus and Italy have not submitted the mandatory report on how they used revenues from auctions under the EU Emissions Trading System (ETS).
The reporting deadline was 31 July 2026. The two countries received a combined €2.7 billion from ETS allowance auctions in 2025.
At EU level, emissions from sectors covered by the Effort Sharing Regulation – including domestic transport, buildings, agriculture, small industry and waste – are projected to fall by around 38.5% by 2030 compared with 2005.
This would leave the bloc 1.5 percentage points short of its 40% target. Germany, Ireland and Malta are expected to face the largest shortfalls.
EU emissions fell by 1.6% in 2025
“Europe is stepping up its efforts, not slowing down,” Hoekstra said in the report’s introductory statement.
According to provisional data, the EU’s net greenhouse gas emissions fell by 1.6% in 2025 and are now 39% below 1990 levels, while GDP has increased by 74% over the same period.
Emissions in sectors covered by the ETS fell by 2%, while those covered by the Effort Sharing Regulation remained stable. Net carbon removals from land increased by around 11%, although the EU still faces a projected shortfall of 40–55 million tonnes against its 2030 target.
Asked whether a 1.6% annual reduction was consistent with the Commission’s message that Europe was stepping up its efforts, Itkonen said the overall picture had to be considered. She acknowledged, however, that faster progress was needed, an issue also expected to be discussed at COP31 in Antalya.
Commission defends targeted changes to climate rules
Itkonen was also asked about targeted legislative changes, including a three-year flexibility period for car CO2 emissions and annual flexibility for methane emissions.
She argued that these adjustments did not weaken the EU’s level of ambition or its 2030, 2040 and 2050 climate targets. According to the Commission’s estimates, they would not affect emissions in the long term.
The report also highlights progress in clean technologies. Battery electric vehicles accounted for 1.9 million new registrations, or approximately one in six new vehicles.
Wind and solar power reached a combined capacity of 611 GW, representing 49% of the EU’s electricity generation capacity. New heat pump installations reached 41 GW, up from 26 GW in 2024.
ETS revenues totalled €43.2 billion, an increase of 11%, with €23.9 billion going to member state budgets. Aviation emissions rose by 0.2%, while maritime transport emissions fell by 4%.
EU prepares for further climate action
The EU has established a legally binding target to cut emissions by 90% by 2040. The amended European Climate Law entered into force in April, while the Commission proposed an overhaul of the ETS in July to cover the period after 2030.
The report estimates that climate adaptation will require annual investment of around €69 billion until 2050. Meanwhile, economic losses caused by extreme weather events have reached €822 billion since 1980.
A new Climate Resilience Framework, presented in October, includes a proposal for a European Climate Resilience Act.
Also read: COP31 opens in Antalya amid growing pressure for climate action
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