BRUSSELS : The deal, reached after months of tense negotiations, includes the use of foreign carbon credits to cover part of the reductions.

Negotiators from EU member states and the European Parliament confirmed the agreement early Wednesday, marking a crucial step toward Europe's broader goal of achieving net-zero emissions by 2050.

Under the deal, European industries will be required to cut emissions by 85%, with the remaining 5% of reductions met through the purchase of international carbon credits. These payments will support developing countries in lowering emissions on Europe’s behalf. The EU also left the door open for the future use of an additional 5% of such credits, a move that may further ease domestic pressure in the decades ahead.

While the target exceeds the climate pledges of most major economies, including China, it falls short of the recommendations of the EU’s own climate science advisers. It also scales back the European Commission’s original proposal, signalling the deep political divide among member states over the pace and cost of climate action.

Countries such as Poland, Slovakia and Hungary pushed back against deeper cuts, arguing that industries already grappling with high energy prices, competition from low-cost Chinese imports, and new U.S. tariffs could not absorb further strain.

Meanwhile, the Netherlands, Spain and Sweden urged more aggressive targets, citing escalating extreme weather events and Europe’s need to keep pace with China in green technology manufacturing.

In a bid to break the deadlock, negotiators agreed to delay the start of a new carbon pricing system for fuels by one year, now set to begin in 2028, staving off what many governments feared would be a politically sensitive rise in household energy costs.

The agreement, described as a political compromise balancing environmental urgency and economic realities, must now be formally approved by both the European Parliament and EU member states.