Dispatch from the European Union | October '25

After a mammoth first term in which the EU passed the world’s most comprehensive package of climate laws in history, European Commission president Ursula von der Leyen is rowing back her signature Green Deal. The Commission has already announced a possible withdrawal of the planned Green Claims Directive and scrapped the Sustainable Use of Pesticides Regulation. The EU Deforestation Regulation has been kicked into the long grass. The Omnibus package proposed by the Commission – a promise also made to Donald Trump in the EU-US trade deal reached in January (though the EU parliament rejected the proposal in a surprise first vote result this week) – will weaken corporate sustainability reporting rules that were only just passed.

EU member state leaders at the European Council summit last night paved the way for the proposed emissions reduction target for 2040, but only after the Commission promised to dilute existing EU climate laws (more on that below). The 2035 phase-out deadline for new combustion engine cars, the focus of intense German pressure, was also discussed at the summit and could be next. On the international stage, the EU showed up empty-handed to New York Climate Week last month (see below).

The shift was signalled earlier in the year when the Commission rebranded the Green Deal as the “Clean Industrial Deal”. The Commission says this represents the next phase where climate concerns are balanced with fears over European competitiveness. But NGOs say it amounts to a bonfire of von der Leyen’s climate laws.

• CBAM deadline looming – The new Carbon Border Adjustment Mechanism, the EU mechanism to have importers pay if their product has a higher carbon footprint than their European counterparts, is coming into effect on 1 January 2026. Industry associations in Brussels are warning that they do not have enough guidance in place for how it will work, but the Commission is trying to ease concerns by saying this is just the start of a gradual process. “CBAM starts on 1 January 2026 […] but it will only have teeth when the first declarations are expected by mid-2027,” Maria-Elena Scoppio, the director of the Commission’s tax unit, told a fertilisers industry event in Brussels last week. “In the meantime, we will be testing and refining the different elements.” She said by the end of the year the Commission plans to come out with an idea to protect EU exports from climate-unfriendly competition on the world market, an aspect not covered by CBAM.
• 2026 climate agenda – The European Commission unveiled its work programme for 2026 this week. For climate legislation, we can expect a package on strengthening energy security in the first quarter. The Circular Economy Act, a proposal to simplify electrification processes, and a revision of ETS rules for maritime and aviation and the market stability reserve will come in the third quarter. The Omnibus exercise will also bring revisions of Energy Union governance, CO2 transportation markets, the post-2030 energy efficiency framework, renewable energy rules and the climate adaptation plan in that quarter. In the fourth quarter there will be an update of the frameworks for effort sharing on greenhouse gas emissions reductions (non-ETS sectors) and for land use, land use change and forestry. Many of these reforms would be necessary to meet the planned 2040 target.

• Adjusting to new IRA reality – Business people in Brussels seem to have got the memo that Joe Biden’s supposed “most significant climate legislation in world history”, the US IRA, has been completely gutted by Trump’s One Big Beautiful Bill Act – unlike policymakers in this town. For two years, we’ve been hearing from industry that the EU needed to give massive subsidies to its companies to stop them moving to the US to take advantage of IRA cleantech subsidies. Well, those subsidies are now gone, and EU industry has suddenly gone quiet. On 16 October, the Brussels and Washington offices of the Heinrich Böll Stiftung think tank held an event in Brussels looking at how the IRA’s demise will impact the Clean Industrial Deal plans. The panel “what remains of the IRA and the European Green Deal” made for particularly depressing listening. But one thing is clear: even with the partial row-back of the Green Deal, it cannot be compared to the complete collapse of federal climate action in the US thanks to legislation which relied entirely on subsidies and tax rebates rather than on obligations and targets.
• As climate campaigners adjust to the new reality of lower ambition across Europe, how can the public be convinced to get on board again with climate action when they have such immediate concerns about war vs peace and authoritarianism vs democracy on their minds? This was the subject of an event in Brussels hosted by Clean Energy Wire and the European Policy Centre last week. Participants at the event debated whether climate campaigners should flood the zone with warnings to counter misinformation, or whether they should focus on the economic arguments and how Europe is ceding cleantech advancements to China.