ESG / CSR
Industries
Ecology
Greenly solutions
The European Green Deal, launched in December 2019, is a bold plan to make the EU the first climate-neutral continent by 2050. This initiative aims to tackle the urgent threat of climate change and environmental damage, transforming the EU's economy and society in the process. However, the journey is not without its challenges. The rise of right-wing populism in Europe, public skepticism, and protests from farmers and other groups present growing hurdles to achieving these ambitious goals.
👉 In this article, we’ll dive into the European Green Deal, exploring its key objectives, strategies, and the political and social challenges it faces.
The European Green Deal is the EU’s roadmap to a sustainable economy. It aims to make Europe the first climate-neutral continent by 2050, addressing the pressing issues of climate change and environmental degradation.
The Green Deal includes a wide range of policies and initiatives designed to transform various sectors of the economy. Its core objectives include achieving net-zero greenhouse gas emissions by 2050, decoupling economic growth from resource use, and ensuring no person or region is left behind in the transition. This plan also aligns with the EU's commitment to the Paris Agreement, aiming to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
However, the context in which the Green Deal was first established has shifted dramatically. The COVID-19 pandemic, the war in Ukraine, and rising geopolitical tensions have added layers of complexity to its implementation. Additionally, the results of the 2024 European Parliament elections, which saw significant gains for the centre-right and far-right parties, could significantly impact the Green Deal’s future. The new political landscape introduces uncertainties, as rising right-wing sentiments and public protests could threaten to derail these efforts.
The European Green Deal sets out ambitious targets to transform the EU’s economy and make it sustainable for future generations. The cornerstone of this initiative is the commitment to achieving climate neutrality by 2050, meaning that any greenhouse gas emissions that are not able to be eliminated will be balanced by an equivalent amount of carbon removal or offset from the atmosphere.
One of the key intermediate targets is to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. This "Fit for 55" package includes a comprehensive set of proposals across multiple sectors, such as energy, transport, agriculture, and construction, ensuring that each contributes to the overall reduction goals. The plan involves updating existing legislation and introducing new measures to drive significant reductions in emissions.
Financial investment is crucial to achieving these targets. The European Green Deal Investment Plan, also known as the Sustainable Europe Investment Plan, aims to mobilise at least €1 trillion over the next decade. This funding will come from various sources, including the EU budget, national governments, and private investments. Additionally, the Just Transition Mechanism will provide €100 billion to support regions and workers most affected by the transition to a green economy, ensuring that no one is left behind.
Essentially the European Green Deal is a blueprint for transforming the entire European economy and society. This transformation is driven by the urgent need to address climate change while creating new economic opportunities and enhancing the well-being of European citizens.
As already mentioned one of the key focuses of the Green Deal is decoupling economic growth from resource use. This means shifting towards a circular economy where resources are reused and recycled, reducing the overall environmental footprint. It’s hoped that this approach will spur innovation, create green jobs, and boost competitiveness in global markets. By working towards a sustainable economic model, the EU aims to lead by example, demonstrating that environmental sustainability and economic prosperity can go hand in hand.
Investment in green technologies is a key driver of this transformation. The Green Deal encourages substantial investment in renewable energy, energy efficiency, and sustainable infrastructure. These investments are expected to generate significant economic returns, create millions of jobs, and position Europe as a leader in green technology innovation.
The transition to a green economy also promises significant social benefits. The Green Deal aims to improve public health by reducing pollution and enhancing air and water quality. Additionally, it seeks to address social inequalities through the Just Transition Mechanism, which provides financial support to regions and communities most affected by the shift to a low-carbon economy. This ensures that the benefits of the green transition are shared broadly, leaving no one behind.
Social inclusion and equity are central to the success of the EU Green Deal. The EU recognises that the transition to a sustainable economy must be fair and inclusive, ensuring that vulnerable groups and communities receive the support they need. This includes measures to combat energy poverty, provide retraining and re-skilling opportunities for workers, and support small businesses in adapting.
The clean energy transition is another central component of the European Green Deal, aiming to drastically reduce the EU’s reliance on fossil fuels and promote the use of renewable energy sources. Given that energy production and consumption account for 76% of the EU’s greenhouse gas emissions, the transition to clean energy is essential for achieving climate neutrality by 2050.
One of the key strategies of the Green Deal is to rapidly phase out coal and other fossil fuels. The EU plans to significantly increase the share of renewable energy in its energy mix, targeting at least 42.5% (and ideally reaching 45%) of its energy from renewable sources by 2030, up from the previous target of 32%. This involves major investments in wind, solar, and other renewable energy technologies, supported by the Fit for 55 package and the REPowerEU plan. The REPowerEU plan, in particular, was introduced in response to the energy market disruptions caused by the COVID-19 pandemic and the war in Ukraine. It aims to diversify energy supplies and enhance energy security.
Energy efficiency is another critical component of the clean energy transition. The EU has set targets of improving energy efficiency by 11.7% by 2030, which will help reduce overall energy consumption and lower emissions. This includes measures to upgrade buildings, enhance industrial processes, and promote energy-saving technologies. The EU’s Energy Efficiency Directive and the Energy Performance of Buildings Directive are key legislative tools driving these improvements.
The transition also focuses on creating a more integrated and resilient European energy market. By enhancing grid infrastructure and promoting digitalisation, the EU aims to ensure that renewable energy can be efficiently distributed across member states. Investments in smart grids and interconnections are crucial for balancing supply and demand, especially as the share of variable renewable energy sources like wind and solar increases.
Sustainable industrialisation is a key pillar of the European Green Deal, aiming to modernise Europe's industries while reducing their environmental footprint. This approach focuses on promoting a circular economy, enhancing resource efficiency, and fostering innovation in clean technologies.
A crucial component of this transformation is the Green Deal Industrial Plan, which includes the Net-Zero Industry Act. This act aims to scale up the manufacturing of clean technologies within the EU, such as batteries, solar panels, wind turbines, and hydrogen technologies. By supporting these industries, the EU aims to enhance its competitiveness and secure its place as a leader in the global green technology market.
Additionally, the plan focuses on enhancing resource efficiency across various sectors. This involves reducing the energy and materials used in production processes, promoting the use of recycled materials, and extending the lifecycle of products. For example, the EU’s Circular Economy Action Plan outlines measures to ensure that products are designed to last longer, are easier to repair, and are more recyclable. This not only helps reduce environmental impacts but also drives innovation and creates new business opportunities.
The Green Deal also addresses the challenge of decarbonising energy-intensive industries such as steel, cement, and chemicals. These sectors are crucial to the European economy but are also significant sources of emissions. To support their transition, the EU is investing in research and development of breakthrough technologies like carbon capture, utilisation, and storage (CCUS) and green hydrogen. These technologies have the potential to drastically reduce emissions from industrial processes.
The transport sector is another significant contributor to greenhouse gas emissions in the EU, accounting for nearly 25%. The European Green Deal sets ambitious goals to make transport more sustainable, aiming to drastically reduce emissions from road, rail, air, and maritime transport.
One of the key initiatives is the transition to zero-emission vehicles. Recently proposed legislation targets a 55% reduction in CO2 emissions from cars and a 50% reduction from vans by 2030. It also aims to achieve zero emissions from all new cars and vans by 2035, as part of the ‘Fit for 55’ legislative proposals. To support this transition, the EU is investing in the necessary infrastructure, including the installation of electric charging and hydrogen refuelling stations.
The Green Deal also addresses emissions from aviation and maritime transport. For the aviation sector, the EU has introduced measures to increase the use of sustainable aviation fuels (SAF), setting a minimum share of SAF to be blended with kerosene. Additionally, carbon pricing for aviation will be expanded to cover more flights, encouraging airlines to adopt cleaner technologies and fuels. In the maritime sector, new targets for reducing the greenhouse gas intensity of fuels used by ships are being implemented, promoting the adoption of renewable and low-carbon fuels. The EU Emissions Trading Scheme has also been expanded to cover CO2 emissions from all large ships (of 5,000 gross tonnage and above) entering EU ports, regardless of the flag they fly.
Another important aspect of making transport sustainable is the shift towards more efficient and cleaner modes of transportation. The Green Deal encourages a shift from road transport to rail and inland waterways for freight transport, which can significantly reduce emissions. Investments in modernising and expanding rail infrastructure are crucial for achieving this shift. The EU aims to improve public transportation systems by making them more accessible, reliable, and affordable. This will help reduce the reliance on private cars and lower overall transport emissions.
The Green Deal also addresses the importance of urban mobility. Cities play a critical role in achieving transport sustainability, as they are often hotspots for traffic congestion and pollution. The EU supports initiatives to promote cycling, walking, and the use of public transport in urban areas. Sustainable urban mobility plans are being developed to integrate these modes of transport, reduce traffic congestion, and improve air quality.
Additionally, from 2027, emissions from road transport will be included in the EU Emissions Trading System (ETS). This will put a price on carbon emissions from road transport, incentivising a shift to electric vehicles.
Buildings account for about 35% of the EU’s energy-related GHG emissions, making this sector a key target for achieving significant emissions reductions. This is why the European Green Deal sets ambitious goals to at least double the annual rate of energy-efficient renovations in the next decade. This initiative, often referred to as the ‘Renovation Wave’, aims to upgrade both public and private buildings, enhancing their energy performance and reducing their carbon footprint. By improving the energy efficiency of buildings, the EU aims to cut emissions, lower energy bills for consumers, and create healthier living environments.
The public sector is also playing a leading role in the renovation wave. The revised Energy Efficiency Directive mandates that Member States renovate at least 3% of the total floor area of buildings owned by public bodies each year. This not only reduces emissions from public buildings but also sets an example for the private sector and citizens to follow.
A key strategy in this effort to make buildings more energy efficient is the revision of the Energy Performance of Buildings Directive (EPBD). The revised Directive establishes zero-emission buildings as the new standard for all new constructions. Starting from January 1st, 2028, all new publicly-owned buildings must have zero on-site emissions from fossil fuels, and from January 1st, 2030, this requirement will extend to all other new residential and non-residential buildings (with specific exemptions).
The Social Climate Fund, a part of the European Green Deal, provides financial support to vulnerable households and small businesses to help them manage the costs of the green transition. This fund is crucial for ensuring that energy efficiency improvements do not disproportionately impact those with limited financial means. It also aims to tackle energy poverty by supporting measures such as the installation of insulation, the replacement of old windows and doors, and the upgrade of heating systems.
The European Commission’s Farm to Fork strategy was originally hailed as a highly ambitious initiative that would transform European agriculture. This strategy aimed to address the environmental and health impacts of food production while ensuring food security and supporting farmers. Key targets included reducing the use of chemical pesticides by 50% and fertilisers by 20% by 2030 and increasing the area of organic farming to 25% of total agricultural land by 2030. These reductions were seen as essential for protecting biodiversity, improving soil health, and reducing pollution in water bodies.
However, four years on little is left of this ambition. Intense pressure from farming lobby groups, food industry associations, and centre-right politicians has forced the commission to drop most of the proposals. Farmers across Europe argued that the restrictive measures would decrease food production, resulting in widespread protests. As a result, the European Commission decided to abandon the targets set out in the legislation to cut pesticide and fertiliser use by 50% by 2030. This decision represents a significant rollback of initiatives aimed at curbing pollution, and environmentalists have voiced concerns about the potential negative repercussions for wildlife and sustainability.
The rollback of the Farm to Fork strategy represents a significant shift in the EU's approach to agricultural transformation. As the political debate over strengthening climate and biodiversity regulations continues, a clear divide remains on balancing agricultural needs with sustainability objectives. The future of the EU’s agricultural policy will depend on finding a more unified approach that addresses the concerns of all stakeholders while promoting environmental sustainability. Critics argue that the EU needs to become more realistic about the ambitions of the Farm to Fork strategy and that the agricultural sector should be more involved with its development.
Protecting biodiversity and natural resources is another component of the European Green Deal. The EU’s Biodiversity Strategy for 2030 aims to halt and reverse the degradation of ecosystems, promoting biodiversity recovery and enhancing the resilience of the natural environment.
One of the key targets of the Biodiversity Strategy is to protect at least 30% of the EU’s land and sea areas by 2030. This includes expanding existing Natura 2000 areas - the EU-wide network of protected lands and marine regions - and creating new protected areas. These efforts aim to safeguard habitats and species, ensuring that ecosystems can continue to provide essential services such as pollination, water purification, and climate regulation.
The strategy also focuses on restoring degraded ecosystems across the EU. The Nature Restoration Law aims to restore at least 20% of the EU’s land and sea areas by 2030. Restoration activities include reforestation, wetland restoration, and river free-flowing initiatives. These measures not only enhance biodiversity but also increase carbon sequestration, helping to mitigate climate change.
In addition to protecting and restoring natural areas, the Biodiversity Strategy addresses the sustainable use of natural resources. The Soil Monitoring Directive is a key initiative aimed at improving soil health across the EU. Healthy soil is essential for food production, water regulation, and carbon storage. The law will establish a framework for monitoring soil health and promoting practices that prevent soil degradation and enhance soil biodiversity.
The Green Deal also emphasises the importance of sustainable bioenergy. While bioenergy plays a role in reducing dependence on fossil fuels, it must be produced sustainably to avoid negative impacts on biodiversity and land use. The EU has introduced sustainability criteria for bioenergy, ensuring that it does not lead to deforestation, habitat loss, or other harmful environmental effects.
The European Green Deal not only aims to transform Europe but also positions the EU as a global leader in climate action. The EU has a long history of setting ambitious climate policies and leading international efforts to address climate change. With the Green Deal, the EU seeks to further enhance its role on the global stage, promoting sustainable development and encouraging other countries to increase their climate ambitions.
One of the key aspects of the EU’s global climate leadership is its commitment to international climate agreements. The EU played a pivotal role in the negotiation of the Paris Agreement and continues to be a strong advocate for its implementation. The Green Deal aligns with the Paris Agreement's goals of limiting global warming to well below 2 degrees Celsius and pursuing efforts to limit it to 1.5 degrees Celsius. The EU’s leadership is crucial for encouraging other nations to commit to similar targets and take meaningful action to reduce emissions.
The EU also leverages its market power to promote global climate action through initiatives like the Carbon Border Adjustment Mechanism (CBAM). The CBAM aims to prevent carbon leakage by ensuring that imported goods are subject to the same carbon pricing as products manufactured within the EU. This mechanism not only protects the competitiveness of European industries but also incentivises other countries to adopt comparable carbon pricing measures, promoting global emissions reductions.
In addition to regulatory measures, the EU provides significant financial and technical support to developing countries to help them address climate change. The EU and its Member States are the largest contributors to international climate finance, providing billions of euros annually to support climate mitigation and adaptation projects in developing countries. This funding helps vulnerable nations build resilience to climate impacts, transition to renewable energy, and implement sustainable land-use practices.
The Green Deal also addresses the importance of sustainable trade and supply chains. The EU is working to ensure that its trade policies and agreements support climate and environmental objectives. This includes promoting sustainable production practices, reducing deforestation, and enhancing the transparency and traceability of supply chains. By setting high environmental standards, the EU aims to influence global trade practices and encourage other countries to adopt sustainable policies.
The European Green Deal now stands at a critical juncture following the 2024 European Parliament elections. The political landscape and the balance of power within EU institutions will significantly influence the future direction and implementation of the Green Deal. With the recent election results, which saw significant gains for center-right and far-right parties, the next few years will be crucial for the EU’s climate agenda.
The 2019 European Parliament elections saw a surge in support for parties advocating strong climate action, which helped pave the way for the Green Deal. However, the 2024 elections have shifted the balance. Far-right and populist parties, generally skeptical of ambitious climate policies, have gained considerable ground. This shift could pose substantial challenges to the continued progress of the Green Deal.
One significant concern is the impact of rising energy prices and economic instability on public support for the Green Deal. The COVID-19 pandemic and the war in Ukraine have exacerbated these issues, leading to increased energy costs and supply chain disruptions. These economic pressures have fueled public protests and opposition, particularly from sectors like agriculture and energy-intensive industries, which fear the financial burden of the green transition.
The political dynamics within the EU are also shifting. The center-right European People’s Party (EPP), which emerged stronger in the 2024 elections, traditionally supports market-based climate solutions. However, internal divisions within the EPP regarding the Green Deal’s ambitious targets may surface. The far-right and populist parties are likely to push back against new regulations and targets, framing them as detrimental to national sovereignty and economic interests. This could complicate efforts to pass new climate legislation and implement existing policies.
Moreover, the potential re-election of Ursula von der Leyen as President of the European Commission remains uncertain, adding another layer of complexity. Her leadership has been pivotal in driving the Green Deal, and her re-election would be critical for its continuation.
Despite these challenges, several factors could bolster the Green Deal’s prospects. The growing public awareness of extreme weather events and their link to climate change has heightened the demand for urgent action. Additionally, the decreasing costs of renewable energy technologies make the economic case for the green transition more compelling. Businesses and investors are increasingly recognizing the long-term benefits of sustainable practices, which could drive further support for the Green Deal.
The next few years are critical for the European Green Deal. The political, economic, and geopolitical challenges ahead require strong leadership, effective policies, and broad-based support to ensure that the EU remains on track to achieve its climate goals and lead global efforts to address climate change. The outcome of the 2024 elections underscores the need for strategic alliances and innovative approaches to sustain the momentum of the Green Deal in this evolving political landscape.
At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required.
If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.
How do Democrats view global warming, what kind of climate change policies do they create, and how do they draft new climate legislation and environmental regulations with climate change and other key factors in mind?
How do Republicans view global warming, what kind of policies do Republicans implement to fight climate change, and how do they approach the creation and passing of legislation with the concept of climate change in mind?
In this article, we’ll explain what kerosene is, why it’s bad for the planet, and what we could use instead of kerosene.
In this article, we'll discuss the Principles for Responsible Investment and how these six principles can benefit both ESG factors and your finances.
