Climate & Energy Climate & Energy Last updated: 25 May 2026 European Green Deal — Implementation Status The Green Deal remains formally intact but has been depoliticised and partially deprioritised relative to industrial competitiveness and defence. Delivered: European Climate Law (net-zero by 2050, 55% reduction by 2030) Fit for 55 package — largely adopted by 2024 EU ETS Phase 4 operational Renewable Energy Directive (RED III) — 42.5% target (aspiration for 45%) CBAM in transitional phase Deforestation-free products regulation Stalled/Watered Down: Nature Restoration Law — facing significant member state pushback 2035 combustion-engine car ban softened — changed to a 90% CO2 reduction target with e-fuel/biofuel loopholes The "Industrial Accelerator Act" (originally "Industrial Decarbonisation Accelerator Act") had the word "decarbonisation" dropped from its title by von der Leyen in Sept 2025 amid internal disputes Agricultural emissions — CAP reforms watered down after farmer protests Fit for 55 Package 13 legislative proposals covering: Tightened EU ETS (more ambitious cap, faster reduction) Parallel ETS for buildings and transport (ETS2) — launched 2024, politically contentious CBAM — transitional phase active, full implementation from 2026 2035 ICE phase-out — amended to 90% CO2 reduction target Higher renewables and energy efficiency targets Social Climate Fund — to cushion impact of carbon pricing on vulnerable households CBAM implementation snags: Complexity of calculating embedded emissions for imports Administrative burden on importers Developing countries have complained to the WTO Free allowance phase-out alignment with CBAM ramp-up still disputed UK has introduced its own CBAM — alignment/mutual recognition talks ongoing EU ETS (Phase 4) Carbon price trajectory: Fell from peaks of ~€100/t in early 2023 to around €65-75/t through 2024-2025 due to reduced industrial output and faster renewables deployment Market Stability Reserve continues absorbing surplus allowances ETS2 (buildings/transport) launched in 2024 — has been highly politically contentious, with member states fearing public backlash over heating costs EU's carbon price is still the world's highest, but the gap with other jurisdictions is narrowing Renewable Energy Directive (RED III) Target: 42.5% renewables share of energy consumption by 2030 (aspiration for 45%) Legally binding since late 2023 EU's solar/wind growth pushed fossil-fuel power to its lowest level in 40 years (Jan 2025) Solar capacity additions hit records in 2024-25 Wind: offshore wind expansion accelerating but facing permitting bottlenecks and supply chain constraints Energy Crisis Fallout (Ukraine War / REPowerEU) REPowerEU Outcomes Russian pipeline gas imports fell from ~40% of EU gas in 2021 to under 8% by 2023 LNG imports from US and Norway soared European renewable capacity additions hit records New LNG terminals built at pace in Germany, Netherlands, Greece Russian Gas via Ukraine Transit The 5-year transit deal expired on 31 December 2024 Hungary and Slovakia continued receiving some Russian gas via TurkStream Zelensky refused to renegotiate transit As of May 2026, no Russian gas flows through Ukraine LNG Dependency EU became the world's largest LNG importer in 2023 Critics warn of LNG lock-in and stranded assets — long-term contracts lock Europe into fossil fuel infrastructure Germany's new LNG terminals are controversial with climate groups New Iran War (Feb 2026) — Second Energy Crisis The US-Israeli attack on Iran triggered a second energy shock Cost the EU an additional €24bn for oil/gas imports Oil spiked over $100/barrel Commission launched "AccelerateEU" (23 April 2026) — 44 actions including: Electrification target Gas storage fill requirements Tax changes favouring electricity over gas Accelerated renewable permitting Green Deal Industrial Plan / NZIA / CRMA Net-Zero Industry Act (NZIA) Adopted Spring 2024 Targets 40% of net-zero tech manufacturing needs met domestically by 2030 Covers solar, wind, batteries, heat pumps, electrolysers, grid technologies Simplified permitting for strategic projects Critical Raw Materials Act (CRMA) Adopted 2024 Targets: 10% extraction, 40% processing, 25% recycling of strategic raw materials within EU Diversification away from Chinese dominance in rare earths, lithium, cobalt Strategic partnerships with resource-rich countries (Chile, Australia, Namibia) Industrial Accelerator Act (March 2026) Proposed "Made in Europe" procurement rules for low-carbon steel, cement, and EV parts Controversial — some environmentalists call it "climate law in disguise", others fear climate focus being sidelined for competitiveness Von der Leyen dropped "decarbonisation" from the title Germany opposed restrictive "made in Europe" rules Member State Pushback Farmer Protests Major protests across France, Germany, Netherlands, Poland, Belgium in 2023-24 Directed against: fertiliser restrictions, CAP reforms, nitrogen rules, pesticide bans Commission watered down several agricultural proposals The far right successfully channelled this anger — Politico: "Dutch farmers back Wilders as centrist nightmares come true" Centre-Right Turn Germany's CDU won Feb 2025 election — climate ambition downgraded relative to competitiveness France's RN expected to do well in 2027 presidential race European Parliament shifted right in 2024 elections — Greens lost seats AfD/RN climate denialism: AfD platform includes leaving EU climate policy, reopening coal plants 2040 Target Debate Commission proposed 90% net reduction by 2040 (July 2025 amendment to Climate Law) Key controversy: includes international carbon credits from 2036, wider use of carbon removals in EU ETS Climate NGOs called it a "watered down" target EU missed the Feb 2025 UN deadline for new NDCs — now faces Sept 2026 deadline Member states (led by Germany, Poland, Italy) pushed for flexibilities Heat Pump and EV Market EV Sales EVs outsold petrol cars in EU for the first time in December 2025 (217,898 EVs vs 216,492 petrol, up 51% YoY) Full-year 2025: 17.4% market share (up from 13.6% in 2024) Chinese EV maker BYD tripled market share to 1.9% Tesla's market share dropped 37.9% in 2025 amid Musk controversy Automotive sector pushed back hard — Stellantis claimed "no natural demand" for EVs EU responded by softening the 2035 ban to a 90% CO2 target with e-fuel loopholes Heat Pump Slowdown Heat pump sales in Europe fell in 2024 after a boom in 2022-2023 Partly due to policy uncertainty in Germany and reduced gas/electricity price differential AccelerateEU plan includes tax changes to favour electricity over gas Sources Carbon Brief — EU solar/wind pushed fossil fuel to lowest level in 40 years (Jan 2025) Carbon Brief — EU 2040 target: 90% net reduction proposed (July 2025) Carbon Brief — Nature Restoration Law pushback Politico Europe — "Industrial Decarbonisation Accelerator Act" renamed (Sept 2025) Politico Europe — "AccelerateEU: 44 actions for second energy crisis" (Apr 2026) Politico Europe — "Commission's stealth migration drop" — broader policy shift context BBC News — Farmer protests across Europe (2024) BBC News — Germany's Zeitenwende climate implications Wikipedia — Fit for 55, RED III, NZIA, CRMA, EU ETS Phase 4 European Commission — REPowerEU outcomes report Politico Europe — "Dutch farmers back Wilders as centrist nightmares come true" (Feb 2024)