Building a credible climate transition plan is one of the most complex challenges companies face on the path to sustainability. Not for lack of willingness, but for a practical reason: it has never been clear how much emission reduction is expected from a specific company, in a specific sector, by a specific date.
In November 2025, the European Commission answered that question with a concrete document: European Climate Law-aligned Transition Pathways - 25 sector-specific decarbonisation fiches, each with key performance indicators (KPIs) aligned with the binding targets of the European Climate Law. Developed by ICF and CLIMACT on behalf of the Directorate-General for Climate Action, the document is publicly available to all companies.
This is not a direct regulatory obligation. But it is the reference tool that companies subject to the CSRD (the EU Corporate Sustainability Reporting Directive) can use to build credible transition plans - and that others not yet obligated can use voluntarily to stay ahead of expectations from banks, investors and clients.
What the EU Sector Pathways are and what they do
The EU Sector Pathways are sectoral decarbonisation trajectories built on recognised European scientific and policy scenarios. They are not predictions - they do not say what will happen - but they indicate the direction and pace at which each sector should move to be consistent with the EU's climate targets.
The underlying logic is straightforward: the European Climate Law sets targets at economy-wide level (at least 55% emission reduction by 2030, climate neutrality by 2050). But individual companies do not operate at economy level - they operate in specific sectors: steel, cement, freight transport, food processing. Without a sectoral reference, it is practically impossible for a company to know whether its reduction targets are as ambitious as the science requires.
The EU Sector Pathways fill that gap. For each of the 25 sectors covered, they provide two types of pathways:
- Emission pathways: showing the expected trajectory of sector emissions (in absolute and intensity terms) from 2015 to 2050, with corridors that reflect scenario uncertainty.
- Decarbonisation lever pathways: showing the expected role of the main decarbonisation actions in each sector - energy efficiency, electrification, fuel switching, carbon capture and storage.
These are grounded in the Commission's Impact Assessment for the 2040 climate target and in internationally recognised scenarios including the Science Based Targets initiative (SBTi) 1.5°C pathways and the IEA Below 2 Degrees scenario.
25 sectors, one reference for each
The sectoral coverage is broad, designed to include the activities that represent the vast majority of direct emissions in the European economy. The 25 sectors span agriculture, forestry and land use, buildings (residential and tertiary), energy supply, industry - chemicals, metals, non-metallic minerals, paper, food and beverage - and transport across all modes. For activities not explicitly covered, a dedicated "Other sectors" fiche is available.
Source: ICF and CLIMACT for the European Commission - European Climate Law-aligned Transition Pathways, November 2025
Source: ICF and CLIMACT for the European Commission - European Climate Law-aligned Transition Pathways, November 2025
Why this document arrives at a critical moment
The timing is not coincidental. Several regulatory shifts in recent months have made the transition plan question urgent for a far wider range of companies than it might appear.
CSRD and the ESRS standards require in-scope companies to disclose a climate mitigation transition plan (Disclosure Requirement E1-1). This plan must include emission reduction targets compatible with limiting warming to 1.5°C, identified decarbonisation levers, and an estimate of the investments required. Without a sectoral reference, building this content credibly is extremely difficult.
The 2025 Omnibus Package redesigned the CSRD scope, raising the threshold to 1,000 employees. Many companies that had been preparing are now formally outside direct obligations. But market pressure - from clients, banks and investors - remains. The EU Sector Pathways are equally useful for companies operating on a voluntary basis.
The ECGT Directive, enforceable from September 2026, prohibits environmental claims unsupported by verifiable evidence. A transition plan built on Commission-recognised sectoral pathways is precisely the kind of documentary foundation that makes climate communications defensible.
25
sectors covered by EU Sector Pathways
2015–2050
time horizon for decarbonisation corridors across all KPIs
Source: ICF and CLIMACT - European Climate Law-aligned Transition Pathways, November 2025
How a company can use the EU Sector Pathways in practice
The Commission's guidance document identifies three practical uses, corresponding to the three main elements of a transition plan under European sustainability reporting standards.
Setting science-based emission reduction targets. For each sector, the emission corridors provide a reference trajectory. A steel company can compare its targets against the European steel sector pathway. A food manufacturer against the food and beverage pathway. The fiches also include comparisons with global SBTi trajectories, with explanations where the two diverge significantly.
Identifying decarbonisation levers. For each sector, the lever pathways show how much energy efficiency, electrification, fuel switching and carbon capture are expected to contribute. This helps companies understand not just how much to reduce, but how - and with what urgency each type of intervention needs to enter operational planning.
Estimating investment requirements. The EU Sector Pathways draw on the technology assumptions of the Commission's 2040 Impact Assessment, which includes detailed investment cost data for the main decarbonisation technologies sector by sector. These data allow companies to build estimates of the investments needed - an element explicitly required under ESRS reporting.
The EU Sector Pathways do not tell a company what to do. They tell it where its sector needs to go - and what tools are expected to get it there. The path remains the company's choice.
What the EU Sector Pathways are not - and why that matters
The document makes several key points particularly clear.
Not forecasts. The corridors represent scenarios consistent with EU climate targets, not projections of what will happen. Individual companies may deviate from sectoral trajectories based on their own specific context.
Not binding. The EU Sector Pathways are voluntary tools. No regulation requires their use. But once they become the shared reference across the European market - banks, investors, large clients - not using them when building a transition plan requires an explanation.
They do not replace measurement. Using them requires a starting point of measured emissions (Scope 1, 2 and 3). Sectoral pathways only make sense relative to a company's own data - and only if that data is comparable with the metrics the pathways use.
They do not cover everything. The 25 sectors include the vast majority of direct European emissions, but services, tertiary logistics, finance and many others fall into the residual "Other sectors" category, where the reference corridor is less granular.
Want to understand how to use the EU Sector Pathways to build your company's transition plan?
How Kyklos Carbon can help
Turning a sectoral reference into a concrete transition plan requires a structured approach. We do not start from the EU Sector Pathways - we start from the company: its carbon footprint, its current position relative to its sector trajectory, the actions already under way.
At Kyklos Carbon, we support companies at every stage of this process:
- Carbon footprint calculation (Scope 1, 2 and 3): the essential starting point for any comparison with sectoral pathways. Without measured data, the European corridors remain abstract benchmarks.
- Positioning against the sectoral trajectory: we compare the company's emissions and decarbonisation levers with the relevant EU Sector Pathways corridor, identifying where it stands today and the gap between current targets and those consistent with the European Climate Law.
- Transition plan construction: emission reduction targets, priority decarbonisation levers, investment estimates - structured in line with ESRS requirements and the EU Sector Pathways reference framework.
- ESG communication support: a transition plan only has value if it can be communicated credibly. We help companies translate data and trajectories into a narrative that holds up under scrutiny from banks, investors and clients.
Let's build your company's transition plan together - grounded in measured data and recognised European references.
Conclusion
The publication of the EU Sector Pathways is a meaningful step in the development of a credible corporate climate planning system in Europe. For the first time, companies have access to a publicly available sectoral reference, developed by the European Commission, aligned with the European Climate Law and comparable with the most widely used international standards.
This is not a finishing line - the pathways will be updated as technologies evolve and policies change. But it is a concrete tool that reduces uncertainty around one of the hardest questions in any transition plan: how much do I need to reduce, relative to what benchmark and with what urgency? There is now an official answer.
Good intentions are not enough. You need to know where your sector has to go - and build a plan that demonstrates how you will get there.
Sources
European Commission - Impact Assessment for the 2040 climate target, SWD/2024/63 final
Commission Delegated Regulation (EU) 2023/2772 - European Sustainability Reporting Standards (ESRS)
European Commission - Transition Pathways for European Industrial Ecosystems
Science Based Targets initiative - SBTi Corporate Net-Zero Standard v1.2
Do you have a climate transition plan? The European Commission has just published the reference tool you need to build one.