Brussels — On July 2, 2025, the European Commission proposed a legally binding target: net greenhouse gas emissions in the EU to be cut by 90% by 2040 compared to 1990 levels. This target aligns with Europe’s roadmap to net‑zero by 2050 and builds upon its 55% cut goal for 2030 under the European Climate Law.
The proposed climate package outlines that emission cuts will occur primarily within the EU, aided by industrial decarbonization, renewable energy deployment, and energy-efficiency upgrades. However, a flexibility mechanism has been introduced to allow up to 3 percentage points—equating to a 3% gap—to be covered by international carbon credits sourced from developing nations, starting in 2036. Additionally, industries like steel, cement, and aluminium may receive free carbon permits under a revised CBAM-funded regime to remain globally competitive. The final adoption of this target requires approval by the European Parliament and member states, with negotiations expected to continue into September ahead of COP30 in November.
Implications for Somalia and the Horn of Africa
A New Market for Carbon Credits
Somalia and neighboring countries may benefit from the EU’s inclusion of international carbon credits. Programs focused on forest conservation, reforestation, wetland restoration, and renewable energy development could generate tradable credits. However, ensuring that these projects deliver real, additional emission reductions will be critical. Effective oversight mechanisms must be established to prevent “greenwashing” and ensure that local communities receive equitable benefits.
Adaptation as a Security Imperative
Climate change has long been a security threat multiplier in the Horn of Africa. Increasingly frequent droughts, floods, and land degradation have driven displacement, worsened food and water insecurity, and contributed to local conflicts. With the EU now formally recognizing the security dimensions of climate change, future funding is likely to prioritize integrated resilience programs. These may include early-warning systems, climate-smart agriculture, and natural resource governance aligned with conflict prevention.
Accelerated Local Transitions & Funding
As one of the world’s most climate-vulnerable countries, Somalia stands to gain from increased EU engagement in clean energy and resilience financing. The Clean Industrial Deal, which commits the EU to decarbonizing heavy industries by 2040, could open avenues for joint investment in infrastructure and green jobs. Somalia’s abundant but untapped wind energy potential and its weak national grid offer opportunities for climate-smart partnerships and private-sector involvement.
Supporting Climate Adaptation Efforts
Somalia continues to face the fallout of the 2020–2023 drought, which displaced millions and led to tens of thousands of deaths. EU-backed adaptation programs—such as rainwater harvesting, drought-resilient agriculture, afforestation, and early warning networks—could be scaled to meet growing needs. Engagement with existing UNDP and Green Climate Fund initiatives could ensure a coordinated and well-funded response that benefits the most vulnerable communities.
Political & Diplomatic Momentum
While some climate advocates have criticized the EU’s use of international credits as a potential loophole, the mechanism also offers an entry point for countries like Somalia to participate meaningfully in global carbon markets. Horn governments and regional bodies like IGAD can proactively shape certification rules to promote transparency, environmental integrity, and fairness. Somalia could also explore formal bilateral agreements to lock in long-term access to EU climate finance, boosting local capacity and sustainability.
Outlook: Opportunities & Risks
Opportunities include access to new climate finance via carbon markets, strengthened adaptation funding, and accelerated investment in renewable energy and resilience. These benefits, however, come with risks: poor project oversight, unequal benefit distribution, and over-reliance on external funding could undermine long-term sustainability. Effective governance, strong institutions, and community-led project design will be essential for maximizing gains.
The EU’s 2040 climate target offers a unique opportunity for Somalia and the Horn of Africa to integrate more deeply into the global climate economy. If implemented equitably, the target could bring climate finance, clean energy, and resilience benefits to one of the world’s most climate-threatened regions. However, success depends on robust project standards, inclusive governance, and proactive diplomacy from regional leaders.
