Jaeseung Lee
For decades, Europe has been seen as a leader in the fight against climate change. From signing the Kyoto Protocol in 1997 to launching the ambitious European Green Deal in 2019, the European Union built a reputation as a pioneer in environmental policy. The Green Deal promised to achieve carbon neutrality by 2050 and reduce greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. But today, that direction seems to be changing.
The European Commission, a subsidiary branch of the EU, recently introduced the Omnibus I package, which weakens several pillars of the Green Deal. Under the banner of “simplification,” rules on corporate sustainability reporting, due diligence, and green investment taxonomy have been relaxed. For example, the Corporate Sustainability Reporting Directive (CSRD), which was supposed to cover 50,000 companies, will now apply to only 10,000. Critics argue that simplification is becoming a synonym for deregulation. They warn that instead of making the rules easier to apply, the European Union(EU) is removing the very tools designed to hold companies accountable for their climate impact.
This shift did not happen in a vacuum. Major business federations, such as Medef, BDI, and Confindustria, from France, Germany, and Italy respectively, have lobbied strongly for lighter regulations. The automobile industry has also pushed back, especially against the planned 2035 ban on combustion engine cars.
French President Emmanuel Macron has even spoken about a “regulatory pause,” while new French laws have reintroduced certain pesticides and eased environmental reviews for large farms and infrastructure projects. These changes highlight how economic competitiveness is increasingly being placed ahead of environmental protection.
The European Climate Law, passed in 2021, still requires the EU to cut emissions by 55% by 2030 and reach net zero by 2050. A new 2040 target—reducing emissions by 90%—is currently under discussion. National Energy and Climate Plans (NECPs) are supposed to keep member states on track, with regular progress reports.
Yet the European Environment Agency warns that current progress is insufficient. Sectors like buildings, transport, and agriculture are moving too slowly, while Europe's 'carbon sink,' an indicator on its ability to absorb carbon dioxide through forests and land, is shrinking.
Supporters of deregulation argue that Europe needs to stay competitive in a tough global market, especially against the U.S. and China. According to the Council of the European Union, the excessive amount of reporting requirements burdens companies and slows down innovation.
But others counter that strong climate rules actually give Europe an edge. For instance, the EU's Carbon Border Adjustment Mechanism, or CBAM, helps protect European businesses from imports produced under weaker climate standards. Pulling back on regulations, critics such as the environmental NGO Climate Action Network Europe and analysts at the European Policy Centre argue, could not only weaken Europe’s credibility in climate diplomacy but also risk its access to global markets like China, which is building its own sustainability standards.
Europe’s reputation as a climate leader is now at stake. While the EU once set the global tone for climate action, the recent wave of regulatory rollbacks signals a major shift in political will.
The big question is whether this change in direction is temporary—driven by short-term economic pressures—or whether it marks a deeper retreat from Europe’s green ambitions.
As the world faces intensifying climate risks, the answer will determine not just Europe’s future, but also its role on the global stage.