Climate Policy Update: Is the Green Deal on Track?

When Ursula von der Leyen unveiled the European Green Deal in 2019, she famously called it "Europe's man on the moon moment." The ambition was staggering: to transform a fossil-fuel-dependent economy into the world's first climate-neutral continent by 2050, decoupling economic growth from resource use.

Now, halfway through the critical decade of 2020-2030, the initial euphoria has met the gritty reality of implementation. The legislative architecture is largely in place, but the political consensus that built it is showing cracks.

The Legislative "Fit for 55"

Technocratically, the EU has delivered. The "Fit for 55" package—designed to cut emissions by 55% by 2030—is no longer just a proposal. It is law.

• The ETS Reform: The Emissions Trading System, the EU's carbon market, has been expanded. Shipping and aviation are now paying for their pollution, and the number of free permits for heavy industry is being phased out.
• CBAM (Carbon Border Adjustment Mechanism): This world-first "carbon tariff" prevents carbon leakage. If a company imports steel from a country with lax climate laws, they must pay a tax equivalent to what they would have paid if the steel were made in Europe. This levels the playing field for clean European producers.
• Renewable Energy Directive: Targets for solar and wind deployment have been raised, and permitting processes—often the biggest bottleneck—are being streamlined.

The Industrial Headwinds

However, the economic context has shifted dramatically since 2019. The energy crisis triggered by the war in Ukraine exposed the vulnerability of European industry. Energy prices in Europe remain significantly higher than in the US or China.

European manufacturers are sounding the alarm. They argue that while they support decarbonization, the current pace is leading to deindustrialization. Chemical giants like BASF are scaling back operations in Europe and investing in China or the US, drawn by cheaper energy and the subsidies of the Inflation Reduction Act (IRA).

The EU's response—the Net-Zero Industry Act—aims to keep green manufacturing at home, but critics say it lacks the financial firepower of its American counterpart.

The "Greenlash": Social and Political Resistance

The most visible threat to the Green Deal, however, is not industrial but social. The "Greenlash" has become a powerful political force.

The Farmers' Protests that swept across the continent in 2024 were a turning point. Tractors blocking Brussels and Berlin forced policymakers to retreat on pesticide regulations and nature restoration laws. The message was clear: the rural economy feels it is bearing a disproportionate burden of the transition.

Similarly, the ban on the sale of new internal combustion engine cars by 2035 faces growing skepticism. As Chinese electric vehicles (EVs) flood the market, threatening the crown jewel of European industry—its automakers—politicians are under pressure to soften the timeline.

A "Just Transition" or a Delayed One?

As we look toward the next legislative cycle, the focus is shifting. The era of "setting targets" is over; the era of "managing costs" has begun.

The next Commission will likely focus less on new environmental rules and more on Industrial Policy and Social Fairness. The "Social Climate Fund" is designed to help vulnerable households upgrade their homes and cars, but many argue it is insufficient.

Is the Green Deal on track? On paper, yes. The laws are stricter than ever. But in reality, the pace of the transition will now depend on the EU's ability to ensure that going green doesn't mean going into the red—for businesses or for families. The climate doesn't wait for politics, but politics might force the climate agenda to slow down.