The European Green Deal under Geopolitical Turbulence: Strengthening, Delay or Dismantling?

List of Abbreviations

CBAM – Carbon Border Adjustment Mechanism

CSDDD – Corporate Sustainability Due Diligence Directive

COP – Conference of the Parties

EGD – European Green Deal

EEA – European Environment Agency

EPP – European People’s Party

ESAB-CC – European Scientific Advisory Board on Climate Change

ETS – EU Emissions Trading System

ETS II – Emissions Trading System for Transport and Buildings

EUDR – EU Regulation on Deforestation-Free Products

EUTR – European Timber Regulation

GHG – Greenhouse Gases

IPCC – Intergovernmental Panel on Climate Change

LULUCF – Land Use, Land Use Change and Forestry

MEP – Member of the European Parliament

NDCs– Nationally Determined Contributions

NECP – National Energy and Climate Plan

UNFCCC – United Nations Framework Convention on Climate Change

WTO – World Trade Organization

1. Introduction

The European Commission launched the European Green Deal (EGD) in 2019 with the goal of making the EU the first climate-neutral continent by 2050. It consists of strategies and legislation targeting all sectors to support the transition to a low-carbon and sustainable society. However, multiple crises within and outside of the EU threaten to derail its ability to achieve a just green transition. The COVID-19 crisis, Russia’s invasion of Ukraine and the ensuing cost-of-living and energy crises have left their mark on European politics. The 2024 European Parliament elections changed the Parliament’s composition by strengthening the centre-right (EPP) while weakening left-liberal-green groups (RENEW, S&D and Green). In this shifting political landscape, policymakers in EU institutions such as the Commission and the European Parliament, as well as in the Member States, seem to be less willing to engage in sustainability policies and are instead putting more emphasis on security and competitiveness. Furthermore, while the EU has a legacy as a leader in global climate governance and in UN climate diplomacy, its capacity to steer outcomes was increasingly challenged by geopolitical rivalry, trade conflict and internal political turbulence at the UN Conference of Parties (COP30) in Belém, Brazil in November 2025.

The aim of this paper is to assess the progress of the EGD by analysing whether there has been a weakening, delay or even rollback of climate and sustainability policies. To capture these broader trends, we focus on central policies reflecting the internal and the external dimension of the EGD. For the internal dimension, we examine the implementation of EU’s Fit for 55 Package and the formulation of the 2035/2040 climate targets, both of which are critical for raising EU’s climate ambitions within its member states. For the external dimension, we analyse the Corporate Sustainability Due Diligence Directive (CSDDD) and EU Deforestation Regulation (EUDR), which aim to make EU’s trade relations more sustainable by holding companies operating on the EU market accountable for the socio-environmental impacts of their activities in distant sites of production.

We start by introducing the EGD, followed by an assessment of whether and how the internal and external policies have been weakened. Against the backdrop of a weakening of the EU’s internal and external climate and sustainability policies, we assess in section 4 how this affects the prospect of EU’s global climate leadership ten years after the adoption of the Paris Agreement1 and in the UN climate summit in Belém, Brazil, in November 2025. Section 5 summarises the result and advances five policy implications, followed by the conclusions.

1.1 What is the European Green Deal?

The EGD was adopted in 2019 as a comprehensive strategy to foster sustainable growth and make Europe carbon neutral by 2050 to align with the EU’s climate target with the goals of the Paris Agreement. The EGD formed the key policy priority area for the von der Leyen I Commission – as evidenced by the large number of legislative initiatives compared to its other policy packages (see Table 1).

Table 1. Legislative train of the European Commission 2019–2024
	Legislative initiatives	Announced	Tabled	Blocked	Close to adoption	Adopted/Completed	Withdrawn
1. A European Green Deal	0	26	21	5	10	102	5
2. A Europe Fit For The Digital Age	0	18	9	4	1	77	5
3. An Economy that Works for People	0	11	17	14	4	92	7
4. A Stronger Europe in the World	0	14	6	6	0	55	2
5. Promoting our European Way of Life	0	5	20	2	3	72	1
6 A New Push for European Democracy	0	5	10	1	4	44	2

Note: The full legislative package of the EGD can be explored at: https://www.europarl.europa.eu/legislative-train/schedule?pov=commission-2019-24 (accessed 6 October 2025).

The EGD contains a wide range of policies and strategies aimed at improving sustainability within and beyond the EU’s borders (for an overview see Figure 1). While climate and environment measures aimed at greening the EU’s internal activities are key for its transition, its external actions ensure that the products placed on the single market are sustainable and that the EU’s global footprint decreases. This combination of internal and external actions has been emphasised as important for the EU’s global leadership. Ambitious internal measures give the EU credibility and allow it to lead by example. Legislation targeting global supply chains constitutes an important external measure for the EU to shape sustainability policies outside its borders. When combined, such policies could contribute to lowering emissions within the EU and greening the supply chain of products entering the EU.

Climate and the environment were at the forefront of the EU’s policy agenda when the EGD was first introduced, driven by widespread climate protests and the success of green parties in the European elections (Bocquillon 2024). In this context, the COVID-19 pandemic and Russia’s invasion of Ukraine initially appeared to reinforce climate legislation, particularly by highlighting the need for energy security and resilience. The EGD was thus first introduced in a favourable political environment, which made it easier to accelerate its ambitions. In the context of increasing cost-of-living and energy crises, however, sustainability policies gradually lost prominence on the agenda, and EU policymakers seemed less willing to take strong actions. At the same time, far-right political actors have begun positioning themselves on sustainability issues to mobilise voters (Dickson and Hobolt 2024; Patterson 2023). They portray climate and environmental measures as elitist and ideological and use this approach to delegitimise the entire European project. These longer-term trends of polarisation and constraining politicisation culminated in the European Parliament elections in 2024, in which green parties suffered losses, while far-right parties made significant gains.

1.2 Policy change: Dismantling or strengthening the EGD?

We use the concept of dismantling to assess the progress of the EGD. Following Jordan et al. (2013), we define dismantling as negative policy change – that is, the delay, weakening or even rollback of legislation. Delay refers to a postponement of the negotiation and implementation of legislation, while weakening means reducing legislative ambition by, for example, lowering targets or introduced flexibilities. Rollback occurs when legislation is entirely removed. These dismantling activities can happen openly, as when far-right parties propose to reject legislation, but they can also take more subtle forms, such as weakening measures under the banner of ‘simplification’ (Gravey and Jordan 2020).

The regulations we selected experienced different degrees of policy change due to their specific characteristics and degree of institutionalisation. Policies targeting global supply chains, such as the CSDDD and the EUDR, were only recently introduced as binding laws. These laws are controversial, as they are often perceived as burdensome for companies, which makes them more vulnerable to being weakened. In contrast, the EU has developed climate legislation for three decades already, which makes it harder to roll back policies that are already strongly institutionalised. Moreover, while the Fit for 55 Package and the CSDDD are broad, cross-sectoral policies, the individual pieces of legislation target often specific sectors or groups of sectors; the Emissions Trading System (ETS), for example, primarily covers power and energy-intensive industry sectors, while the EUDR focuses on forest-risk commodities. This might also affect how different actor coalitions position themselves in trying to weaken or support these policies.

2. Internal actions under the EGD: EU climate policy

2.1 Creating resilience to crises through stronger climate policy

The key objective of the EGD is to reach climate neutrality by 2050. To achieve this goal, the EU has revised and built on its rich climate policy architecture (Dupont et al. 2024; Gheuens 2024). As a first step, the EU adopted the European Climate Law in 2021, making climate neutrality legally binding and raising the 2030 GHG reduction target to 55% below 1990 levels. It thus gives direction to all other legislative initiatives and stands at the centre of the EGD.

To achieve this new 2030 target, the EU has revised its implementing legislation in the Fit for 55 Package (for an overview, see Box 1). This entailed bringing existing legislation up to speed and introducing new policy instruments such as the Carbon Border Adjustment Mechanism (CBAM) that introduces a carbon tax at the EU’s borders to level the playing field between European and foreign companies, and the extension of the Emission Trading System (ETS II) to the transport and building sectors (Oberthür and Kulovesi 2025). The EU also created new institutions like the European Scientific Advisory Board on Climate Change (ESAB-CC) to encourage science-based policymaking, and the European Climate Pact, which was launched in 2020, to encourage citizens, communities and organisations to take climate action and actively participate in achieving the EU’s climate targets (Oberthür and Kulovesi 2025; Tosun 2022).

Box 1. The Fit for 55 Package and its key files

Key objective: 55% emission reduction by 2030 compared to 1990 Key files: The European Climate Law The Emission Trading System (ETS) The Effort Sharing Regulation The Renewable Energy Directive The Energy Efficiency Directive The Land Use, Land Use Change and Forestry Regulation (LULUCF) The CO2 emission performance standards for new passenger cars and lightweight vehicles The Carbon Border Adjustment Mechanism (CBAM) ETS II for transport and buildings

Much of the Fit for 55 Package was discussed during the COVID-19 pandemic and at the start of Russia’s invasion of Ukraine and the resulting energy crisis. In contrast to what one might expect, these strengthened initial legislative efforts instead of weakening them (Dupont, Oberthür, and von Homeyer 2020; von Homeyer, Oberthür, and Dupont 2022). Climate action formed a central part of the COVID-19 recovery, which resulted in additional green funds. Russia invading Ukraine once again highlighted the importance of EU energy independence via the use of renewable energy and additional energy savings. This resulted in stronger renewable energy and energy efficiency targets than those first proposed. These crises therefore led to a policy strengthening of prior legislation, and of the Commission’s proposals. The Fit for 55 Package increased the ambition of EU climate policy, expanded its scope to include different sectors and actors, and introduced new policy instruments (Bocquillon 2024; Oberthür and Kulovesi 2025).

Nevertheless, the long-term impact of these events is proving to have more negative effects on EU climate policy as the full implementation of the Package seems at risk. The EU is currently not on track to meet the 55% objective – although the measures together should result in overshooting it (EEA 2024). However, a gap remains between the legislation and what the Member States are planning to do. The continuing cost-of-living crisis originating from the pandemic and worsened by the war in Ukraine has reduced policymakers’ willingness to engage in costly climate action – especially in the centre and on the right side of the political spectrum of the European Parliament (Bocquillon 2024). This has resulted in efforts to delay and water down key files of the Package – especially after the loss of the Greens and the rise of right-wing parties in the 2024 European Parliament elections. For instance, legislation to decarbonise the automobile sector has come under pressure, and the phase-out of the sale of fossil fuel cars after 2035 has been weakened. The extension of the ETS to transport and buildings has also been delayed until 2028.

2.2 2040 target: Weakening the pathway to 2050

The changing tide is also clear from the discussions on the 2040 emission reduction target, which is a crucial step towards climate neutrality and the EU’s commitment to the Paris Agreement’s objective.

The European Climate Law obliged the European Commission to propose a 2040 emission reduction target in 2024 (Kulovesi et al. 2024). This would give policymakers time to reach an agreement before they had to submit a 2035 target under the Paris Agreement in early 2025. In preparation, the ESAB-CC recommended in 2023 a 90%–95% reduction compared to 1990, deeming it both feasible and sufficient (ESAB-CC 2023). It revisited this advice in light of the ongoing turbulence and changing policy priorities, and reaffirmed it in June 2025, stressing its feasibility and importance for the EU’s strategic objectives (ESAB-CC 2025). However, despite the obligations under the Climate Law, the Commission delayed its proposal until July 2025 – missing both its own and the Paris Agreement’s deadline. While its proposed target of 90% reduction falls within the ESAB-CC’s advice, the inclusion of several points of flexibility risks watering it down and reducing its stringency.

Examples of such flexibilities are carbon offsets and carbon credits. The Commission proposed the (limited) use of international carbon offsets to help achieve the target (European Commission 2025a). Carbon offsets are emission reductions achieved in one country that are used to compensate for emissions produced in another country. Carbon credits are tradable certificates representing a specific amount of reduced or removed GHG emissions, typically one tonne of CO₂ equivalent. From 2036 onwards, high-quality international carbon credits could be bought to make up for a lack of domestic emission reductions. While these could in theory support global climate action and help overcome limitations in the EU’s mitigation efforts, they also pose significant risks to the EU’s climate transition (ESAB-CC 2025). Investments used to buy emission reductions abroad cannot be used to support domestic mitigation action, including helping European businesses and households make the transition. Mitigation is action taken to reduce GHG emissions or to enhance carbon sinks to limit climate change. The use of offsets could also reduce policymakers’ incentives to take necessary and feasible emission reduction measures by buying efforts elsewhere (Carton, Lund, and Dooley 2021)

The ESAB-CC recommended setting separate targets for emission reductions and emission removals (ESAB-CC 2025). Emission reductions decrease the amount of GHG released into the atmosphere, while emission removals take carbon dioxide out of the atmosphere and store it. Removals are often referred to as negative emissions, because they reduce the amount of CO₂ already in the atmosphere and can help compensate for residual emissions that are difficult to eliminate, particularly after 2050. Separate targets could therefore help ensure that removals support – rather than replace – emission reductions. However, the European Commission has proposed maintaining a single ‘net’ emissions target that combines reductions and removals (European Commission 2025). The Commission argues that this reflects the overall climate impact, while critics warn that combining them may obscure how much direct mitigation is required.

Denmark was leading the negotiations as part of its six-month Council Presidency term and was eager to quickly adopt both a 2040 and 2035 target. However, divergences among Member States on the ambition levels of the targets resulted in a delay of the process. Member States like Poland also argued to significantly expand the Commission’s offset proposal from 3% to 10% of the EU’s objective, effectively weakening the target of 90% by 2040 to 80%.2 In the end, they settled for a 5% limit (Council of the EU 2025). Additionally, rather than setting a precise target for 2035 as the EU’s commitment to the Paris Agreement, the Council expressed a range of targets between 66.25% and 72.5% reduction by 2035.

Whereas the Parliament in the past would argue to strengthen the Council’s position, it has now also taken a more modest stance on climate policy. Already from the start it was clear that the Parliament would not push for a more ambitious approach. For the first time, an MEP from the far-right Patriots for Europe – Ondřej Knotek – was in charge of coordinating and drafting the Parliament’s position after outbidding the other political groups. In one of his first moves, Knotek called for a rejection of the 2040 target due to geopolitical conflicts and economic challenges, while also questioning whether the climate crisis is even man-made (European Parliament 2025). While Knotek’s motion was ultimately rejected, the Parliament ended up following almost exactly the less ambitious position of the Council.3

As such, whereas the Fit for 55 Package initially seemed to be strengthened by crises and geopolitical turbulence, the more long-term effects of the multiple crises appear to have had more harmful effects to EU climate policy (see Table 2). The newly introduced flexibilities go against the advice of the ESAB-CC and result in a watering down of EU climate ambitions. Climate legislation has a long legacy in the EU, which makes the outright rollback of adopted or pending policies unlikely. However, the shifting preferences of Member States to prioritise economic competitiveness and security, as well as a weakening of the liberal-green-left coalition in the European Parliament, have led to a rollback and delay.

3. External actions under the EGD: Supply chain regulations

The EU initially played a pioneering role in adopting legislation on supply chains to make EU consumption more sustainable. However, the opposition to these policies has dramatically increased after their adoption due to the shifting political landscape, reinforced by geopolitical turbulence and multiple crises. In this section, we analyse the purpose and content of the CSDDD and the EUDR and how these supply chain regulations have been modified.

3.1 The Corporate Sustainability Due Diligence Directive

The weakening of corporate due diligence

The CSDDD represents one of the most far-reaching and comprehensive attempts by the EU to regulate multinational companies and to extend the EGD beyond its borders. The regulation, adopted in 2024, obliges large companies operating in the single market to identify, mitigate and remediate adverse human rights and environmental impacts in their supply chains. Non-compliant companies face the risk of lawsuits, penalties of up to 5% of global revenues, negative publicity and pressure from investors (Gustafsson et al. 2025).

The CSDDD was not primarily designed as a climate measure but rather as a broad regulation requiring companies to address a wide range of human rights and environmental impacts linked to consumption by EU citizens. With strong backing from civil society, the European Parliament initially proposed that climate change be included as part of these due diligence obligations (European Parliament 2021). However, a series of high-profile litigation cases, such as those against Shell in the Netherlands (2019) and Total in France (2020), created strong pushback from EU member states and businesses out of fear that such legislation would unleash a wave of similar cases (Bartley et al. 2025).

Against this background, the Commission’s original proposal in 2022 introduced a separate article requiring companies to adopt a climate transition plan ensuring that their business models are aligned with the Paris Agreement’s 1.5° C goal (Article 22). Civil society organisations raised concerns that excluding climate change from the core due diligence provisions would make it harder to hold the fossil fuel industry accountable for its role in the climate crisis. They also argued that supervisory authorities should have a mandate to oversee compliance with this article and advocated linking directors’ remuneration to climate goals as well as requiring company boards to oversee climate strategies and targets.4 None of these proposals was ultimately included.

The directive was significantly weakened in the final stages of the CSDDD negotiations in 2024. For example, the financial sector was excluded, and the threshold for inclusion was raised to companies with more than 1,000 employees (compared to 500 in earlier proposals), which significantly reduced the number of companies being regulated. Regarding climate change, the directive ultimately required companies only to adopt and implement a climate transition plan, but without strong enforcement mechanisms. However, while the CSDDD was weakened in some important respects, other provisions – such as civil liability, remediation of adverse impacts and stakeholder participation – remained in the final text.

Implementation delay and rollback during the Omnibus negotiations

There was growing discontent that the CSDDD went too far and could impose significant administrative burdens, while creating a serious threat to the competitiveness of European companies (Gustafsson et al. 2025). This led von der Leyen to launch an Omnibus package in February 2025 aimed at simplifying the CSDDD and aligning it more closely with the Corporate Sustainability Reporting Directive and the EU Taxonomy for Sustainable Activities. The Omnibus negotiation has now reached its end, and it has resulted in a significant weakening of several core elements of an originally strong legislation of global supply chains.

Climate transition plans have been entirely removed, the threshold for inclusion has been raised to the very largest companies with more than 5,000 employees and the harmonised civil liability provision has been removed. Moreover, companies will not have to start complying until 2029. The controversies surrounding the CSDDD are partially explained by the fact that it became part of the EU–US trade deal.5 The Trump administration,6 backed by strong US industry lobbying, has pushed back against the CSDDD, arguing that it threatens American companies’ competitiveness through high costs and legal risks. Such external pressures and crises in the global trade system, combined with the increasing focus on competitiveness in the EU, contributed to the outcome that only a heavily diluted CSDDD would survive the negotiation.

3.2 EU Regulation on Deforestation-free Products

Halting deforestation abroad

The EUDR is a cornerstone of the EGD’s environmental ambition and aims at exporting its environmental standards. The EUDR’s objective is to ensure that key commodities linked to deforestation or illegal practices are neither placed on the European market nor exported from it. By doing so, the regulation supports the EU’s wider climate, biodiversity and sustainability goals, thus reinforcing Europe’s commitment to halting global forest loss and promoting more sustainable supply chains. The regulation applies to cattle, cocoa, coffee, oil palm, rubber, soy and timber, as well as to selected products such as chocolate and tyres. Companies are required to submit a due diligence statement, confirming compliance with the EUDR’s deforestation-free and legality standards. The EUDR repeals the EU Timber Regulation (EUTR), which only focused on the legality of timber products, thereby broadening its scope and strengthening the EU’s commitments to halting deforestation.

Contested negotiations, yet firm objectives

From the outset, the EUDR was designed with ambitious environmental objectives, and, despite extensive negotiations, its core provisions were largely preserved. Agenda-setting began in 2019–2020, amid concerns over the EU’s role in global deforestation, with a formal proposal in 2021. Forest-rich Member States such as Sweden, Finland and Austria raised concerns about national forest management and argued for voluntary rather than binding measures (Berning et al. 2026). Trade partners including Brazil, Indonesia and Malaysia warned that strict due diligence and traceability rules amounted to unilateral trade barriers and would harm smallholders.7 Supportive Member States and NGOs pushed for strict enforcement and broader commodity coverage. At the time of its adoption in June 2023, the EUDR remained close to the European Commission’s original proposal, reflecting a compromise that preserved its core environmental objectives while accommodating some internal political contestations and external pressures from trade partners (Berning et al. 2026).

Delay in implementation and enforcement

The EUDR entered into force in 2023, with implementation set to begin in December 2024. However, following the inauguration of the new von der Leyen Commission, calls to delay or weaken the regulation grew louder. As a result, in December 2024, the European Commission announced that it would grant companies another year before the EUDR will be enforced. Since then, pushback against the EUDR has continued. Several EU politicians have raised concerns or requested postponements, including German Chancellor Olaf Scholz. Austria, together with agriculture ministers from 17 of the EU’s 27 member countries, also advocated for weakening the regulation. In December 2025, the Council and Parliament agreed to postpone the EUDR for yet another year, setting the new application date to 30 December 2026.

Push for simplification and the omnibus process

Mounting political pressure from both within the EU and from international trade partners has fuelled calls to ease the regulatory burden of recent sustainability legislation. For example, the US has heavily lobbied against both the CSDDD and the EUDR,8 and industry associations have similarly raised concerns about compliance costs and supply-chain disruptions. Against this backdrop, the Commission has launched a broader effort to simplify and streamline rules, with the EUDR becoming a central focus of these debates.

In a first round of simplification in April 2025, the Commission aimed to achieve simplification through clarification. The core requirements of the EUDR remained unchanged, but the Commission sought to make compliance easier for companies by streamlining procedures and offering more detailed guidance. Since then, calls for further simplification, and in some cases outright weakening, have intensified. These debates are now tied to a broader omnibus process.

The country benchmarking system, which underpins the EUDR, has also come under repeated criticism. The benchmarking system classifies countries by their risk of producing commodities linked to deforestation. The system is intended to scale compliance efforts according to risk. Companies sourcing from low-risk countries can conduct simplified due diligence, which means that they can skip the full risk assessment and risk mitigation procedure. Products from standard- or high-risk countries face more extensive checks.

When the benchmarking system was published in May 2025, only four countries were classified as high-risk, all of which are already subject to EU or UN sanctions (Russia, Belarus, North Korea and Myanmar). The benchmarking system was criticised for failing to identify countries with significant deforestation risks (e.g. Brazil, Indonesia and Democratic Republic of Congo).9 This outcome reflects a subtle weakening of the benchmarking mechanism, whose limited operationalisation falls short of its potential to effectively signal deforestation risks.

The omnibus process introduced changes and exceptions for downstream actors, such as retailers and large manufacturing companies. A new category, ‘Downstream Operators’ removes due diligence and reporting obligations for both downstream operators and traders. For instance, importers of cocoa beans must submit a due diligence statement, but chocolate manufacturers are not required to submit a new due diligence statement (Council of the EU 2025). Another new category, ‘Micro and Small Primary Operators’, covering natural persons or micro- and small-sized enterprises in low-risk countries, are also exempt from submitting a due diligence statement and instead provide a one-off declaration in the EU information system (European Commission 2025b). These new categories indicate a reduction in the original stringency of the EUDR by creating targeted exemptions.

4. EU’s global climate leadership

Over the decade between the adoption of Paris Agreement in 2015 and COP30 in Belém in 2025, the EU has remained a central actor in global climate governance, although its influence has shifted significantly. In the immediate post-Paris years, the EU projected itself as a normative leader committed to high ambition, ramping up reforms and legislation such as the EGD, the European Climate Law and the Fit for 55 package. Scholars have highlighted that the EU’s institutional density and regulatory power enabled it to shape post-Paris governance instruments, particularly transparency rules and iterative ambition cycles (Oberthür and Dupont 2015; 2021). The EGD itself has been interpreted as both a foreign-policy tool and a redefinition of EU climate diplomacy, with mixed effects on the Union’s external influence (Earsom and Petri 2025). EU’s climate diplomacy reflects a long-standing pattern in which it oscillates between leadership and mediation – a dynamic captured by Bäckstrand and Elgström’s (2013) characterisation of the EU as a ‘leadiator’. The Union has consistently invested in high-ambition coalitions and sought to act as a bridge between developed countries and climate-vulnerable states. Its efforts to promote 1.5° C alignment and a fossil-fuel phaseout illustrate the entrepreneurial leadership described by Parker, Karlsson and Hjerpe (2017). Earlier analyses by Parker and Karlsson (2010) already warned, however, that EU leadership is contingent and prone to erosion when internal coherence weakens or external partners fail to align or retreat.

Policy dismantling has affected the EU’s position as a global leader in environmental governance and has exposed structural limits to the EU’s leadership role. The EU has projected itself as a normative leader committed to high ambition, leading the way by enacting legislative reforms such as the EGD. However, the recent political pushback against climate and sustainability goals has undermined the EU’s international credibility and ability to ‘lead by example’. Policy delays and the dilution of measures reveal fractures in the EU’s regulatory ambition and leadership. These domestic disagreements signal to external actors that the EU’s climate agenda may be unstable or subject to reversal, thus weakening the EU’s normative influence. As a result, the EGD is less likely to serve as a global benchmark if it is perceived as inconsistent or contested.

Producer countries, too, have continuously challenged aspects of the EGD and supply chain regulations in the context of rising geopolitical tensions and contested environmental governance, particularly if they perceive EU measures as externally imposed rather than jointly developed. China’s rise as a technological and financial power has increasingly shaped global climate politics (Zhang and Barr 2020), while the EU’s trade-related climate instruments, including the CBAM, have generated conflicts and divides with emerging economies. Persistent concerns about regulatory overreach and unequal burdens may therefore intensify resistance and challenge the legitimacy of the EU’s initiatives on the international stage. Without sufficient legitimacy and credibility, the EU risks losing its normative authority in global climate and sustainability governance.

Under the Paris Agreement, Parties are required to submit progressively more ambitious nationally determined contributions (NDCs), which set out their planned emission reductions and constitute the backbone of the Agreement’s ambition mechanism. In preparation for COP30, the EU submitted an updated NDC based on its newly adopted 2040 climate target. However, the inclusion of expanded flexibilities and delayed domestic negotiations prompted criticism from both civil society organisations and several climate-vulnerable countries, which argued that the EU’s contribution did not fully match its longstanding leadership ambitions. At the same time, parts of European industry and political actors across the centre-right have argued that regulatory simplification and reduced administrative burdens are necessary to strengthen European competitiveness, investment and economic resilience. The EU’s climate leadership is thus increasingly conditioned not only by the ambition of its international commitments but also by its capacity to implement the EGD consistently under conditions of geopolitical turbulence. The Paris experience therefore highlights a central argument of this report: the EU’s influence in global climate governance depends not only on its negotiating capacity, but on the credibility of its domestic climate ambition and its ability to mobilise coalitions with civil society and climate-vulnerable countries.

The EU entered COP30 in Belém positioned as a longstanding climate leader, a role it has cultivated since the Paris Agreement through ambitious domestic policies such as the EGD and the Fit for 55 package. By COP30, the EU remained influential, but its influence was increasingly contested. Its updated NDC attracted criticism for insufficient ambition, raising questions about the Union’s ability to lead by example. The decade between Paris and Belém thus illustrates both the EU’s enduring normative ambitions and the growing geopolitical, economic and domestic challenges that undermine its climate leadership ambition. COP30 thereby epitomised EU’s diminished influence in multilateral climate negotiations. With the US being absent from COP30 in Belém the EU finds itself unusually isolated, without its transatlantic partner to jointly anchor policy ambitions. As a result, the EU faces a profound challenge: to exercise leadership in a multipolar, turbulent and conflict-ridden world while maintaining the credibility and capacity to deliver climate ambition at home.

5. Policy implications

Our results are summarised in Table 2. Drawing on the analysis of policy strengthening, delay and dismantling across the internal and external dimensions of the EGD and the EU’s role as a global climate leader, this report identifies several priority areas for reinforcing EU climate and sustainability governance under conditions of multiple crises and geopolitical turbulence.

1. Consolidate the implementation of the adopted 2040 climate target by limiting flexibility and safeguarding ambition

Policy implication: As Table 2 and the analysis of the European Climate Law revision show, the adopted 2040 target reflects both policy strengthening (new target) and policy weakening through expanded flexibilities and delayed implementation. This suggests that the main challenge for the EU is no longer adopting increasingly ambitious climate targets but rather to ensure their credible implementation. Maintaining the integrity of the 2040 target will depend on balancing necessary flexibility with the predictability and regulatory certainty required to sustain long-term investments in decarbonisation.

2. Use intermediate targets to stabilise EU climate governance against future crises

Policy implication: While the Fit for 55 Package initially benefited from crisis-induced strengthening, implementation gaps and delays at the Member State level now undermine delivery. An effective tool to ensure an efficient and sustainable implementation phase would be to continue using intermediate targets, as advocated by the ESAB-CC. This is likely to become a decisive test for EU governments and the EGD going forward. Increasing divergence between EU-level ambition and Member State implementation risks weakening both policy effectiveness and the credibility of the EU’s climate governance.

3. Prevent further dilution of the CSDDD

Policy implication: The CSDDD illustrates how newer and less institutionalised EGD instruments are particularly vulnerable to delay and dismantling, especially under the competitiveness and security narrative. It illustrates that recently adopted sustainability legislation remains politically fragile. Regulatory uncertainty may also reduce predictability for companies that have already begun adapting their business strategies to new sustainability requirements. To this end, an important issue ahead will be to ensure the stability of existing legislation and regulatory certainty.

4. Ensure that EUDR implementation reflects actual deforestation risk

Policy implication: The EUDR has faced repeated delays and subtle weakening through exemptions and a limited country benchmarking system, thus reducing its practical impact. Ultimately, the EUDR regulation can still be an effective tool if it manages to reflect actual deforestation risks in products from different countries. However, repeated postponements, broad exemptions and unclear benchmarks may weaken incentives for producer countries and market actors to invest in more sustainable production systems.

5. Rebuild EU global climate leadership through regulatory consistency

Policy implication: Policy dismantling across both internal climate targets and external supply chain regulation undermines the EU’s ability to lead by example and weakens its normative influence in global climate governance. The analysis suggests that the EU’s external climate leadership increasingly depends on the consistency between domestic implementation and international diplomacy. As geopolitical competition intensifies, credibility is becoming an increasingly important source of influence, making sustained implementation of the EGD a prerequisite for effective climate diplomacy.

Table 2. Examples of policy dismantling and strengthening
Legislation	Strengthening	Delay	Weakening	Roll­back
Fit for 55 Package	Stronger energy objectives; availability of additional funds; wider scope; broader policy mix.	Implementation delay for automobiles’ CO2 emissions; insufficient NECPs	Introduction of a ‘net’ target for 2030.	/
2040 Climate target proposal	/	Delay in discussions file.	Introduction of new flexibilities: international offsets, sectoral flexibilities.	/
‍Corporate Sustainability Due Diligence Directive (CSDDD)	/	Application start has been delayed to 2029.	The duty of climate transition planning has been removed, size and turnover thresholds have been increased, the financial sector is excluded, and enforcement has been weakened, including civil liability.	/
‍European Regulation on Deforestation-free Products (EUDR)	Compared to its predecessor, the EUTR, the EUDR significantly expands both its scope and level of ambition.	The start of application has been delayed by two years.	New categories for economic actors exempted from due diligence obligations are proposed, reducing the original stringency of the EUDR. The benchmarking system remains weak, falling short of its potential to effectively signal deforestation risks.	/

6. Conclusion – A resilient but weaker EGD?

Turbulence and crises can create windows of opportunity for policy change, leading to policy strengthening, delay, weakening or rollback. The EGD provides a clear illustration of these dynamics. What was once an ambitious policy initiative under the 2019–2024 Commission has increasingly become subject to contestation and pushback, with both internal and external political pressures shaping the pace and scope of its implementation. These developments highlight how even landmark initiatives remain vulnerable to shifting political priorities. In particular, the shift of the European Parliament from a driver of climate ambition to a more constrained actor following the 2024 elections has affected the EU’s capacity to sustain ambitious climate and sustainability policies.

We can observe instances of policy strengthening, particularly in climate and energy policy during the COVID-19 pandemic and in response to Russia’s invasion of Ukraine. At the same time, clear cases of policy weakening and delay have emerged in response to rising geopolitical tensions and an increasing focus on competitiveness. Table 2 demonstrates that policy change under the EGD cannot simply be characterised as rollback. Instead, strengthening, delay and weakening coexist across different policy domains, which reflects the differentiated effects of geopolitical turbulence on EU climate and sustainability governance. While some dismantling occurs openly, as in the proposals to weaken core provisions of the CSDDD, other changes take more subtle forms under the banner of ‘simplification’. These dynamics affect both the internal and external dimensions of the EGD. Climate policies benefit from a longer history and stronger institutionalisation, but they remain vulnerable to political shifts, resulting in delays and reduced ambition. By contrast, supply chain regulations such as the CSDDD and the EUDR are newer and more exposed to political contestation, which makes them particularly susceptible to weakening. Together, these developments suggest that policy dismantling is not limited to isolated cases but reflects broader pressures affecting the EU’s sustainability agenda. Nonetheless, despite ongoing controversies and lobbying pressures, a complete rollback of these policies has not occurred, thus demonstrating a continued, albeit significantly weakened, EU commitment to its broader sustainability agenda.

The analysis also highlights important implications for the EU’s role as a global climate leader. While the EU has remained a central actor in global climate governance since the Paris Agreement, its leadership has become increasingly contested. The EU’s ‘lead by example’ approach depends on the credibility and consistency of its domestic policies. Delays, flexibilities and weakened implementation risk undermining this credibility and reducing the EU’s ability to act as a bridge-builder and agenda-setter in international climate diplomacy. Overall, the findings point to a shift in the core challenge facing the EGD: from adopting ambitious policies to ensuring their effective and consistent implementation.

We recommend stabilising the EU’s climate and sustainability governance architecture by limiting excessive flexibility in climate targets, strengthening oversight of national implementation, safeguarding the enforcement logic of supply-chain regulations such as the CSDDD and the EUDR, and ensuring consistency between internal ambition and external regulatory action. Strengthening these elements is essential for maintaining the credibility and effectiveness of the EU’s global climate and sustainability leadership.

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1 In the 2015 Paris Agreement, nearly every country commits to limit global warming to well below 2° C above pre-industrial levels, while aiming for 1.5° C. Countries set their own nationally determined contributions (NDCs) to reduce greenhouse gas (GHG) emissions and agree to regularly report progress and strengthen their targets over time. The agreement also emphasises climate adaptation, financial support for developing nations and long-term net-zero emissions goals.

2 https://www.endseurope.com/article/1937781/eu-member-states-eye-compromise-international-offsets-2040-climate-target

3 https://www.endseurope.com/article/1939627/pro-eu-majority-holds-tense-plenary-vote-2040-climate-target

4 https://www.e3g.org/wp-content/uploads/Policy-recommendations-for-the-EUs-Corporate-Sustainability-due-Diligence-Directive.pdf

5 https://policy.trade.ec.europa.eu/news/joint-statement-united-states-european-union-framework-agreement-reciprocal-fair-and-balanced-trade-2025-08-21_en

6 https://www.ft.com/content/82baaf9f-169f-428f-8aaa-a20bc344a635

7 https://web.wtocenter.org.tw/file/PageFile/378593/GAGGEN213.pdf

8 https://policy.trade.ec.europa.eu/news/joint-statement-united-states-european-union-framework-agreement-reciprocal-fair-and-balanced-trade-2025-08-21_en

9 https://www.regnskog.no/en/news/eudr-undermined-reduced-checks-for-top-deforesters.