COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality
Date: 2025-07-02
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU environmental policy, climate change, environmental law, greenhouse gas, joint implementation, pollution control measures, reduction of gas emissions

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   EUROPEAN COMMISSION  Brussels, 2.7.2025  SWD(2025) 524 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality {COM(2025) 524 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The legal basis for this proposal is Article 192 of the Treaty on the Functioning of the European Union 
(TFEU). In accordance with Articles 191 and 192(1) TFEU, the European Union shall contribute to the 
pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of 
the  environment;  promoting  measures  at  international  level  to  deal  with  regional  or  worldwide 
environmental problems, and in particular combating climate change. 

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of environment, the Union’s competence is shared. 

Subsidiarity does not apply for policy areas where the Union has exclusive competence as defined 
in Article 3 TFEU1. It is the specific legal basis which determines whether the proposal falls under 
the subsidiarity control mechanism. Article 4 TFEU2 sets out the areas where competence is shared 
between the Union and the Member States. Article 6 TFEU3 sets out the areas for which the Unions 
has competence only to support the actions of the Member States. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 24: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

The initiative is informed by the broad debate following the 2040 climate target Communication. 
Both  in  the  European  Parliament  and  in  the  Council,  discussions  have  taken  place  on  the 
Communication. 

The  amendment  of  the  European  Climate  Law  builds  upon  the  feedback  received  during  the 
preparation and presentation of the 2040 climate target Communication. The Commission carried 
out a public consultation, running from 31 March 2023 to 23 June 2023. In total, 903 responses were 
received. In addition, stakeholders had the opportunity to share general remarks and feedback on 
the  policy  initiative  through  a  call  for  evidence,  which  received  579  contributions.  Another 
opportunity for feedback was a stakeholder event the Commission hosted on 9 June 2023. The event 
was attended by 34 stakeholder representatives in person, and 48 participants online. The results 
of the consultation activities are reported in the impact assessment accompanying the 2040 climate 
target Communication.  

The amendment of the European Climate Law is informed by the advice of the European Scientific 
Advisory Board on Climate Change  (ESABCC).  In 2023,  the ESABCC  published advice on the 2040 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E003&from=EN  
2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E004&from=EN  
3 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E006:EN:HTML  
4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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climate  target  and  GHG  budget5.  The  ESABCC’s  advice  is  reflected  throughout  the  Impact 
Assessment  and  comparisons  with  the  ESABCC’s  analysis  are  made  where  appropriate.  The 
outcomes of Horizon 2020 and Horizon Europe projects related to climate science and mitigation 
pathways  provided  important  contribution  and  evidence  base  for  the  Impact  Assessment.  The 
ESABCC also adopted a report in which it assesses progress and policy consistency6, and the report 
‘Scientific advice for amending the European Climate Law - Setting climate goals to strengthen EU 
strategic priorities’7.  

Articles 191 to 193 of the TFEU confirm and specify EU competencies in the area of climate change. 
Climate  change  is  a  trans-boundary  problem.  For  trans-boundary  problems,  individual  action  is 
unlikely to lead to optimal outcomes. Instead, coordinated EU action can effectively supplement and 
reinforce national and local action. Coordination at the European level enhances the effectiveness 
of climate action. EU action is justified on grounds of subsidiarity as set out in Article 5 TFEU. Since 
1992, the European Union has worked to develop joint solutions and drive forward global action to 
tackle  climate  change.  Through  coordinated  action  it  will  be  possible  to  take  the  different 
capabilities of Member States and regions to act into account and to use the power of the EU single 
market as a driver for cost-efficient change.  

The European Climate Law sets the Union 2050 climate-neutrality objective and a Union target for 
2030, and the amendment is to include a Union target for 2040. By its nature, a Union target cannot 
be established at national level.  

2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

The explanatory memorandum of the proposal, and the impact assessment under section 3, contain 
sections  on  the  principle  of  subsidiarity.  They  explain  that  climate  change  is  a  trans-boundary 
problem where individual action is unlikely to lead to optimal outcomes. Coordinated EU action can 
effectively supplement and reinforce national and local action and enhances the effectiveness of 
climate action. They also explain that a Union-wide climate target for 2040 will have implications 
across the entire EU economy, is needed to guide a wide range of EU policies and will require EU 
level policy responses, beyond climate policy. Coordinated EU policies and support measures have 
a much bigger  chance  of leading to a true transformation. Through coordinated action it will  be 
possible to take the different capabilities of Member States and regions to act into account and to 
use the power of the EU single market as a driver for cost-efficient change.  

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

The proposal aims to set a Union climate target for 2040 to provide much needed predictability for 
Member States, stakeholders, investors, and EU decision makers for the decisions needed to achieve 
climate  neutrality  by  2050.  This  objective  cannot  be  achieved  by  the  Member  States  alone  as  it 
requires EU level action, a Union target cannot be set by Member States acting alone.  

5 ESABCC, Scientific advice for the determination of an EU-wide 2040 climate target and a greenhouse gas 
budget for 2030–2050. DOI: 10.2800/609405. 
6 ESABCC, Towards EU climate neutrality: progress, policy gaps and opportunities, Assessment Report 2024, 
DOI: 10.2800/216446. 
7 ESABCC, Scientific advice for amending the European Climate Law – Setting climate goals to strengthen EU 
strategic priorities, DOI: 10.2800/1978453. 

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(a)  Are there significant/appreciable transnational/cross-border aspects to the problems 

being tackled? Have these been quantified? 

The  problem  tackled,  i.e.  the  absence  of  an  EU-wide,  economy-wide  ambition  level  for  2040,  in 
terms of net greenhouse gas emission reduction, as an interim target to climate neutrality in 2050, 
is inherently of a transnational/cross-border nature.  

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

the Treaty8 or significantly damage the interests of other Member States? 

Urgent  economy-wide  emission  reductions  to  combat  climate  change  are  necessary  to  fulfil  the 
objectives  of  Article  192  TFEU,  of  preserving,  protecting  and  improving  the  quality  of  the 
environment,  protecting human health, as well as to promote measures at  international level to 
deal climate change. The absence of EU level action could lead to ‘environmental dumping’ between 
the Member States, where Member States compete for the least stringent climate change measures 
to benefit their own economies, damaging the internal market and weakening climate action. An 
urgent climate transition requires a high degree of investments. As a result, foregoing the benefits 
of economies of scale and the possibility of reducing emissions where they are more cost-effective, 
would result in a slower climate transition. 

(c)  To what extent do Member States have the ability or possibility to enact appropriate 

measures? 

The role of Member State action is crucial to achieve the overall EU ambition. The proposal aims to 
provide a direction by further defining the path to climate neutrality. It does not prescribe specific 
policies  and  measures,  leaving  Member  States  flexibility,  taking  into  account  the  regulatory 
framework to achieve greenhouse gas emission reduction targets.  

(d)  How does the problem and its causes (e.g. negative externalities, spill-over effects) vary 

across the national, regional and local levels of the EU? 

The problem and its causes are present across national, regional and local levels throughout the 
EU. 

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The need to address climate change and reduce greenhouse gas emissions and enhance removals 
is widespread across the EU. 

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

The proposal is based on a thorough impact assessment, that looked in detail at the implications of 
different  levels  of  net  greenhouse  gas  emissions  in  2040  and  the  associated  sectoral  pathways 
bridging  2030  to  climate  neutrality  by  2050.  Delivering  the  2040  target  will  depend  on  the  full 
implementation  of  the  2030  framework  and  calls  for  the  development  of  a  post-2030  policy 
framework. This must be complemented with a broad enabling framework, as explained in the 2040 
climate target Communication. 

(g)  How do the views/preferred courses of action of national, regional and local authorities 

differ across the EU? 

Most public authorities welcome the process of setting an EU-wide climate target for 2040. 

8 https://europa.eu/european-union/about-eu/eu-in-brief_en  

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2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

The objectives of the proposed action can be better achieved at Union level by reason of the cost-
efficiency of emissions reductions, coherence of EU action, preserved functioning of the internal 
market and strengthened EU position to foster global action on climate change. 

(a)  Are there clear benefits from EU level action?  

The benefits from EU level actions relate to the explanations below. 

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level 

(larger benefits per unit cost)? Will the functioning of the internal market be improved? 

The reduction of greenhouse gas emissions across the European Union benefits from coordination 
at the EU level given the EU’s single market,  impacting all sectors. The impacts of the 2040 climate 
target on economic activity, employment, cohesion, environment, energy, transport, food security, 
health,  affordability,  distributional  effects,  trade,  and  international  relations  are  examples  of 
elements that can be better considered at EU level. Coordinated EU policies have a much bigger 
chance  of  leading  to  a  true  transformation,  particularly  in  light  of  the  global  dimension  of  the 
challenge.  

(c)  What are the benefits in replacing different national policies and rules with a more 

homogenous policy approach? 

The objective of the amendment is to set a Union 2040 target. It does not impose a homogenous 
policy  approach  in  terms  of  what  measures  and  policies  should  be  adopted.  The  benefits  are 
highlighted in point 2.4(b) above. Through coordinated action it will be possible to take the different 
capabilities of Member States and regions to act into account and to use the power of the EU single 
market as a driver for cost-efficient change. 

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

Reducing GHG emissions is fundamentally a trans-boundary issue that requires effective action at 
the  largest  possible  scale.  The  EU,  as  a  supranational  organisation,  is  well-placed  to  establish 
effective  climate  policy in the  EU. Member States do not  lose  competencies on  which measures 
should be taken in order to reduce greenhouse gas emissions. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

The proposal is setting a Union 2040 climate target.  

3.  Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 
principle of proportionality? 

The  explanatory  memorandum  explains  that  the  proposal  complies  with  the  proportionality 
principle. The proposal aims to provide a direction by further defining the path to climate neutrality. 
It  does  not  prescribe  specific  policies  or  measures,  leaving  Member  States  flexibility,  taking  into 

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account  the  regulatory  framework  to  achieve  greenhouse  gas  emission  reduction  targets. 
Proportionality is also analysed in the impact assessment report accompanying the 2040 climate 
target Communication. 

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

The proposal is the appropriate way forward to further define the path to climate neutrality, setting 
a  Union  2040  climate  target.  It  sets  the  ambition  level,  without  prescribing  specific  policies  or 
measures,  leaving  Member  States  flexibility,  taking  into  account  the  regulatory  framework  to 
achieve greenhouse gas emission reduction targets. 

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily 

on their own, and where the Union can do better? 

The setting of a Union target cannot be done by Member States on their own. 

(b)  Is the form of Union action (choice of instrument) justified, as simple as possible, and 
coherent with the satisfactory achievement of, and ensuring compliance with the 
objectives pursued (e.g. choice between regulation, (framework) directive, 
recommendation, or alternative regulatory methods such as co-legislation, etc.)? 

The proposal sets out amendments to an existing Regulation. This instrument is suitable for 
achieving the objective of setting a Union 2040 climate target. 

(c)  Does the Union action leave as much scope for national decision as possible while 

achieving satisfactorily the objectives set? (e.g. is it possible to limit the European action to 
minimum standards or use a less stringent policy instrument or approach?) 

The proposal further defines the path to climate neutrality but does not prescribe specific policies 
or measures, leaving Member States flexibility, taking into account the regulatory framework to 
achieve greenhouse gas emission reduction targets. 

(d)  Does the initiative create financial or administrative cost for the Union, national 

governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The scope of the current initiative – setting a Union 2040 climate target - focusses on the ambition 
level of a 2040 climate target only. The accompanying post-2030 policy implementation framework 
will  be  designed  and  proposed  in  a  later  stage.  As  such,  in  absence  of  this  post-2030  policy 
implementation framework, it is not possible yet to calculate the administrative costs, regulatory 
fees and charges, and enforcements costs for businesses and citizens. All these elements of the ‘one 
in, one out’ approach will depend on the changes in the implementation of the post-2030 policy 
implementation  framework,  in  comparison  with  the  current  2030  policy  framework.  The 
implementation of the current 2030 policy framework is supported by the 30% minimum climate 
mainstreaming  in  the  MFF,  and  the  37%  minimum  climate  requirement  of  the  Recovery  and 
Resilience Facility (RRF).  

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

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Under the European Climate Law, the relevant Union institutions and the Member States are to take 
the  necessary  measures  at  Union  and  national  level,  respectively,  to  enable  the  collective 
achievement of the climate-neutrality objective, taking into account the importance of promoting 
both fairness and solidarity among Member States and cost-effectiveness. 

The initiative is for setting a 2040 climate target at Union level only. The impact assessment did not 
assess specific aspects at the level of Member States. National budgets will nevertheless need to 
contribute to the  investment  needs either via direct public sector investment, or via support  for 
private investment, subject to the State aid rules where applicable. The extent to which the public 
sector  will  support  the  transition  will  vary  widely  across  Member  States,  depending  on  national 
policy choices. The extent to which Member States have fiscal space to fund the transition also varies 
significantly, depending on their current level of indebtedness and the level of indebtedness that 
they will have by the start of the next decade. 

The EU enabling framework to support the transition to climate neutrality has been expanding. The 
EU Emissions Trading System (ETS) reduces emissions and generated more than EUR 150 billion in 
auction revenues9, which Member States are to use to support climate action. At least 30% of the 
EU’s multiannual financial framework’ for 2021-2027 and of NextGenerationEU (potentially, over 
EUR 670 billion) are to be spent on climate related investments. Increasing provisions to address the 
needs of the most vulnerable include the Just Transition Fund for the most affected territories that 
must cease fossil-fuel related activities, transform and restructure carbon-intensive industries, and 
invest  in  future-proof  jobs  opportunities  and  training.  The  Social  Climate  Fund  supports  social 
cohesion  and  will  mobilise  EUR  86.7  billion  from  2026  to  2032  using  revenues  from  the  ETS2, 
alongside the Modernisation Fund that supports clean energy investments in lower-income Member 
States and the Innovation Fund, one of the world’s largest funds for the demonstration of innovative 
net-zero technologies, with revenues from the EU ETS. 

9 Revenues from the ETS calculated in the period 2012-2022 and until 31 August 2023 (COM(2019) 557 final/2, 
COM(2020) 740 final, SWD(2021) 308 final, and EEX for most recent data). 

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