The European Commission was keen to institute the new rules as it does not believe the continent will be able to stick to its 2050 carbon pledges without them.

With the UK having already left the bloc, it will not be subject to the new rules. Although it has made similar commitments to reach net zero by 2050, it is currently far from being on course to reach its target.

The 55 per cent target, which is a reduction based on 1990 levels of carbon emissions, is substantially tougher than the existing 40 per cent target.

Nevertheless, Greenpeace and other environmental groups have said the improved EU target is insufficient to properly tackle climate change.

“To increase the chances of limiting global heating to 1.5°C and avoid the worst effects of climate breakdown, Greenpeace is calling for at least a 65 per cent cut in EU emissions from polluting sectors by 2030,” the NGO said.

The chairman of the talks, European Council President Charles Michel, said the target had been hard-fought, but was “credible”.

“Europe is the leader in the fight against climate change,” he tweeted, “we decided to cut our greenhouse gas emissions of at least 55 per cent by 2030.”

The EU emissions trading market already seeks to put a price on the carbon emissions that drive climate change.

The price of permits rose to an all-time high above €31 a tonne on Friday, on expectations that the supply of permits would be cut, to force deeper emissions cuts.

The leaders of EU countries were unable to agree on the new target the last time they met in October largely due to financial concerns by nations in the east about how to fund and handle the green transition.

However, a €1.82tr (£1.66tr) package agreed yesterday is designed to deliver a long-term recovery from the coronavirus downturn.

Large amounts of the new cash will be used to fund programmes and investments designed to help the member states, regions and sectors particularly affected by the green transition which are in need of a deep economic and social transformation.

EU leaders have agreed that 30 per cent of the package should be used to support the transition.

Global carbon emissions have fallen sharply in 2020 due to the imposition of Covid-19 lockdowns around the world.

Recent research has found that the UK experienced one of the biggest drops in emissions at 13 per cent due to major reductions in transport, which is the largest source of climate pollution for the country.

In December 2020, global emissions from road transport were still 10 per cent below 2019 levels and aviation pollution was 40 per cent lower than last year.