The European Union reached an agreement late yesterday, Tuesday, to set a legally binding climate-protection target: a 90% reduction in greenhouse-gas emissions by 2040, compared with 1990 levels. According to the European Parliament, 5% of this reduction may come from carbon-offset credits, meaning emissions cuts achieved outside the EU.

In practice, this target requires an 85% reduction in emissions within EU industries, while the remaining 5% would be covered through the purchase of credits from third countries that commit to lowering their emissions on behalf of the EU. The expectation is that these mechanisms will be fully in place by 2036.

What remains now is the formal approval of the target by the European Parliament and the governments of the 27 EU member states, a step that is generally considered procedural once the European institutions have already reached an agreement. Once approved, the target will be written into EU law, setting the course for the next phase of Europe’s climate transition.