The European Green Deal Five Years On

It is nothing short of grotesque: CO2 levels in the atmosphere are reaching record highs, global warming is set to shatter the 1.5-degree threshold this year, and reports of environmental disasters are coming in with ever-increasing frequency. Despite all this, the recently concluded UN Climate Change Conference could only agree on baby steps for climate policy.

In Europe, moreover, another process that had just begun delivering on real climate solutions — the European Green Deal (EGD), launched five years ago — risks stalling due to the recent European elections and ongoing geopolitical turmoil. While the deal has been rightly criticized, particularly on the Left, it has just as frequently been underestimated.

European Commission president Ursula von der Leyen launched the EGD five years ago, on 11 December 2019, with the goal of effecting the transition to a “modern, resource-efficient, and competitive economy”. At that time, UN climate negotiations were exerting just as much pressure on prevailing policies as was the climate movement. The European Climate Law thus mandates that no more greenhouse gases (GHGs) be emitted by 2025. By 2030, emissions are to sink by 55 percent.

From the point of view of environmental groups and scientists, the EGD targets are still too low to guarantee that Europe makes its fair contribution to preventing global temperatures from surpassing 1.5 to 2 degrees Celsius. For example, the Climate Action Network Europe demanded at the time a 65-percent reduction by 2030 and full decarbonization by 2040. Yet even the goals set by the EU, which stipulate increased GHG reductions by 2030, pose a significant challenge.

Early Successes

The European Green Deal, aimed at implementing these climate goals, has seen the passage in recent years of a number of EU guidelines and ordinances meant to prop it up, particularly the “Fit for 55” legislative package. This legislation has indeed seen early successes — the EU is among the few regions worldwide where GHG emissions are declining. The 27 member states together have managed to reduce their gas emissions by 8.3 percent in the last year alone, which means a reduction of 14.3 percent compared to 2019’s pre-pandemic levels. Yet in the three decades since the baseline year of 1990, emissions have only decreased by 37 percent. Still, given that the EU 27’s gross domestic product (GDP) grew by 68 percent over the same period, this means that the decoupling of growth from emissions has been largely successful.

The largest contribution to the Green Deal’s GHG reductions has come from the expansion of renewable energy. At the same time, coal-fired power generation, which is particularly energy-intensive, has been massively reduced. The 26.7-percent reduction of fossil-fuel electricity in Germany (the largest consumer of coal) has thus contributed substantially to the EU’s greenhouse gas reductions. That trend continued for the first six months of this year: green energy kept growing, accounting for nearly 61.5 percent of electricity generated, while coal’s share within Germany’s energy mix dropped off by a further six percentage points.

By 2035, auto emissions will have to be reduced through measures like speed limits, expanding rail and bus infrastructure, and reducing traffic. In Germany specifically, political unwillingness to adopt such measures is evident.

Power generation is therefore undergoing a dynamic transformation, mostly due to an increasingly effective combination of legal tools. One of these is the reformed European Union Emissions Trading System (EU ETS), which is gradually driving fossil-fuel energy and fossil-fuel-based industrial technologies off the market, with allowable emissions volumes dropping each year. Following this prescribed path of emission reductions, the ETS is supposed to lead to zero emissions by 2041. Other legal tools, however, include national feed-in guarantees and subsidies for green energy (such as the Renewable Energy Sources Act or EEG in Germany) and national regulatory laws (like Germany’s Coal Phase-Out Act).

Shortcomings in Transport and Construction

The transport and construction sectors, however, reveal enormous policy shortcomings. The EU largely relies on global targets here — implementation has to come in at the level of the member states, most of which display little ambition to do so. According to the most recent projections by the European Environment Agency, the EU is therefore at risk of failing drastically to meet its own climate goals.

The building sector is particularly problematic: here, the EU is heading for an 18-percent gap to reaching its target by 2030. Nevertheless, the EU’s Energy Performance of Buildings Directives was recently watered down from preliminary drafts thanks to pressure from the real estate lobby. Compulsory renovations will now be missing, as will minimum efficiency standards, which were intended to ensure that the buildings with the least energy efficiency would be renovated first. Had this been made a regulatory and funding priority, Brussels would have killed two birds with one stone: quickly reducing building emissions (and the associated energy costs) in buildings inhabited predominantly by people with low incomes.

It’s a similar situation for car usage. By 2035, the year set for the EU-wide phase-out of combustion engines in new cars, auto emissions will have to be reduced through measures like speed limits, expanding rail and bus infrastructure, and reducing traffic. In Germany specifically, political unwillingness to adopt such measures is evident. The Free Democratic Party (FDP), tolerated by its coalition partners, has prevented sustainable solutions that would, rather than being limited to replacing combustion engines with electric vehicles, lead to a genuine transition in the transit sector by reducing the volume of traffic and expanding public transport as well as bike and walking infrastructure at the expense of car traffic.

Serious opponents of the European Green Deal could still thwart its further development and exploit loopholes.

A new emissions trading system is to be introduced in 2027 and will include the mobility and building sectors. This, too, is a part of the EGD, and may prove expensive for consumers. With transport and building policies lagging far behind target, experts fear that CO2 prices may skyrocket.

In order to support economically weaker households, small businesses, and commuters in coping with the impacts of rising CO2 prices, the EU is introducing a social climate fund for the period from 2026 to 2032. Yet the fund comprises significantly less money than was originally planned: 87 billion euro rather than the initially proposed 144 billion. Much like the FDP’s stance on the debt brake, Social Democrat Olaf Scholz prevented the just financing of socially and ecologically sustainable restructuring within Europe.

There were many other proposals in the EGD as well — barely manageable, the legislative package contains thousands of pages counting impact assessments. It goes into great detail, regulating issues related to expanding renewable energies, energy infrastructure and efficiency, climate-related taxes, levies, and investment evaluations, the gas and future hydrogen sectors, agriculture and forestry, as well as nature areas. There are progressive elements to a number of these proposals, but many do not go far enough. Some, such as the positive valuation of nuclear in the energy “taxonomy”, still merit criticism.

Consequences of a Shift to the Right

In February 2024, the European Commission proposed an intermediate climate goal: a 90-percent reduction in net greenhouse gas emissions by 2040 compared to 1990 levels. This goal is intended to be the basis for draft legislation presented by the new commission. It is not at all certain, however, whether the commission will in fact adopt this intermediate goal into the European Climate Law, nor whether the EU Council or Parliament will support it. The world is changing. On top of the effects of the COVID crisis and the war with Ukraine, Europe is now experiencing a shift to the right. This is apparent not only in Brussels and Strasbourg; it may also be reflected in the next federal government in Germany. This shift is aggravated by trade disputes not only with China, but likely with the US as well.

This conflict situation is all the more dramatic for the fact that we are now entering the time when targeted climate action ought to be hitting home in citizens’ lives more so than before. For example, in the boiler room (remembering the vendetta against the Building Energy Act), in garages (with electric cars, or better yet, bicycles), and, for many people, in the workplace (coal phase-out, transforming the auto industry, and green steel), or at the country home (with more wind or solar parks).

It is precisely because of the difference in implementation phases that the Green Deal has been firmly on course thus far, and why politicians are clearly reluctant to ask the electorate to take the supposedly more uncomfortable next steps. Yet these steps could pave the way for a better life for all — if they were organized such that “those at the top” had to give something up to enable a just transition for “those at the bottom”. The traffic-light coalition failed here too, not just with the debt brake.

There is probably very little that can be done on this front in Europe in light of the current rightward trend. Far more conceivable are possible attempts to weaken the European Green Deal. A radical change of direction (akin to the climate policies projected under Trump in the US) hardly seems realistic, however. After all, the numerous EU legislative acts comprising the EGD have 2030 as their target horizon — overturning them, much like passing them in the first place, would require cumbersome procedures and new majorities. Despite the reinforced political right, these are not likely to materialize easily. Moreover, large segments of industry are already gearing up for the EGD, collecting subsidies for it, and making corresponding investment decisions.

Nevertheless, serious opponents of the European Green Deal could still thwart its further development and exploit loopholes. That could include resistance to the ambitious 2040 targets, blockages to funding and redistribution for a climate-just transition, as well as countless exemptions and dubious accounting methods for meeting climate goals, for example in EU emissions trading. Last but not least, right-wing opponents of climate action could reinforce the tendency toward pseudo-solutions at the expense of third parties — through an uncritical growth fetishism already inherent in the EGD, for example, which would require vast quantities of metals, minerals, and, in the future, hydrogen from the Global South. New conflicts would be inevitable even while the old ones have yet to be solved. Despite the merits of the European Green Deal, these prospects are anything but promising.

Translated by Anna Dinwoodie and Alice Rodgers for Gegensatz Translation Collective.