The European Green Deal is the EU's overarching framework of climate policies, launched in December 2019 under European Commission president Ursula von der Leyen, who declared that "keeping our planet healthy" was the bloc's greatest challenge. It commits the EU to climate neutrality by 2050.
At the Paris agreement in 2015 the EU promised a 40% reduction in emissions by 2030 compared with 1990 levels. In December 2019 the European Council raised that target to 55%, to be achieved through a set of policies known as the Green Deal. Climate Action Tracker, an independent monitor, reckons that if the EU sticks to its currently announced policies the actual cut achieved in 2030 will be 52%—less than the target but still impressive. On July 2nd 2025 the commission proposed a 90% emissions-reduction target for 2040, stipulating that three percentage points could be achieved by paying for carbon-dioxide removals and reduced emissions beyond the bloc's borders through "high-quality international carbon credits" of the sort envisioned by the Paris agreement.
The EU's flagship emissions trading scheme (ETS) covers electricity generation and heavy industry. Much of the decarbonisation to date has come through this mechanism. A new scheme called ETS2, due from 2027, will cover emissions from fuels used in buildings and transport. The price per tonne will initially be considerably lower than that in the existing ETS, with plans for the two to converge later. Fear of political backlash has prompted discussion of softening measures, including exceptions for some classes of emitter and the issuance of additional emission permits if prices rise too high. There are also plans for permanent forms of carbon removal to be integrated in the ETS over the 2030s.
European energy subsidies ran at around €200bn ($230bn) a year from 2019 to 2021, then shot up to €400bn in 2022 owing to the war in Ukraine, outages in the French nuclear fleet and droughts which reduced hydroelectric capacity. The share of subsidy going to renewables actually fell over that period; high wholesale prices meant renewable electricity attracted the guaranteed prices without any topping up from the public purse. A significant amount of subsidy still goes to fossil fuels.
European policymakers have imposed tariffs of 8-35% on Chinese-made electric vehicles, on top of existing tariffs on all cars, arguing that Chinese producers have received unjustified subsidies. China dominates the solar market, leads in batteries, and is the biggest exporter of electric vehicles; the markets for wind turbines and trains may be next. Further protectionism may follow.
A report by Mario Draghi, a former head of the European Central Bank, called for the EU to boost its innovation and the scale of its markets, estimating a need for an additional €800bn a year in public and private investment. In her first proposal for the EU's next seven-year budget starting in 2028, von der Leyen proposed a "Draghi fund" of €451bn over seven years—less than a tenth of the size Draghi suggested, but aimed at green technology not yet ready for the market. The commission's "clean industrial deal", tabled in February 2025, tweaks state-aid and public-procurement rules to allow member states to favour European producers.
Europe's hard-right parties, including Reform UK, the Alternative for Germany and France's National Rally, have made opposition to climate action central to their platforms, calling renewable energy unreliable and unaffordable. Centre-right leaders have begun echoing some of these arguments. Friedrich Merz, Germany's chancellor, told the Bundestag that Germany's 2% share of global emissions means "even if we became climate-neutral overnight, it would not prevent a single extreme weather event." European voters still care about climate change but rank it lower than they used to, with cost of living now the paramount concern. Competition for public spending from defence has intensified since Russia's full-scale invasion of Ukraine in 2022.
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