#ThisWeekOnGreenovate
~10 min read
The European Green Deal is the European Union’s most ambitious promise yet, a plan to make Europe the first climate-neutral continent by 2050. That means rethinking how we produce food, generate energy, move goods, build cities, and trade with the world. It is not just a policy, it is a social contract about what kind of future we want to build together. But here’s the catch: grand promises are easy, delivering them is hard. And the real test of the Green Deal’s credibility isn’t found in speeches or strategy documents, it is in the small, often technical decisions that quietly shape the direction of Europe’s climate future.
Three such decisions happened this week: a push for new climate targets for 2035 and 2040, the adoption of a revised version of the carbon border adjustment mechanism (CBAM), and a debate over the future of sustainability reporting rules. Together, they form a snapshot of where Europe is holding firm and where cracks might be starting to show.
New climate targets beyond 2030
On 30 September 2025, European Commission president Ursula von der Leyen announced that the EU will propose new emissions-reduction targets for 2035 and 2040, to be presented ahead of the COP30 climate summit (Reuters, 30 Sept 2025). At the moment, the EU’s climate policy is anchored in the “Fit for 55” package, a set of laws designed to cut greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels. You can read more about it here.
But 2030 is less than five years away. What happens after that? Until now, there has been no clear answer. The decision to set mid-term goals is meant to change that, to lay down markers on the road to climate neutrality and ensure that Europe does not lose momentum after the first big checkpoint.
It is also a geopolitical move. Climate diplomacy is a credibility game: if the EU shows up at COP30 without concrete new targets, it risks weakening its claim to global leadership. It is worth noting, however, that the EU is slightly behind schedule here. Under the 2015 Paris Agreement (the global climate treaty signed by almost every country) governments are expected to submit their next set of nationally determined contributions (NDCs), essentially their updated climate targets for the period after 2030, about nine to twelve months before the COP30 summit, which will take place in November 2025 in Belém, Brazil. That means the ideal deadline for new targets was around February 2025.
The EU did not meet that suggested timeline, but it is not alone. Many large economies are also finalising their updated targets later than planned. Part of the delay comes from the complexity of negotiating ambitious climate goals among 27 member states with very different energy mixes and economic realities. Policymakers in Brussels argue that taking extra time to build consensus could lead to stronger, more durable targets, even if they arrive a few months later than the UN would prefer.
This tension between ambition and political reality is a defining feature of the Green Deal. Lofty rhetoric is meaningless without binding commitments, and the coming weeks will reveal whether the EU is prepared to turn ambition into law or whether it will hesitate when the politics become difficult.
CBAM’s simplification and its potential pitfalls
If climate targets are about where Europe wants to go, the carbon border adjustment mechanism (CBAM) is about how it gets there. CBAM is one of the EU’s most powerful climate tools, designed to stop “carbon leakage,” a process where companies relocate production to countries with weaker climate laws and then sell their products back into Europe cheaply.
Here is how it works: inside the EU, companies must pay for their emissions under the emissions trading system (ETS), essentially a price on pollution. But producers outside the EU do not face the same costs. CBAM fixes that by requiring importers of high-emission products such as steel, aluminium, cement, and fertilisers to pay a fee if their goods were produced with high carbon emissions. In short, it says: “If you want access to our market, you must play by our climate rules.” You can explore how CBAM functions in more detail here.
On 10 September 2025, the European Parliament approved a revised, simplified version of CBAM, followed by the Council on 29 September 2025 (Grimaldi Alliance, 29 Sept 2025). The changes aim to reduce bureaucracy, especially for smaller importers. Imports of up to 50 tonnes per importer per year will now be exempt, a move the EU argues still covers roughly 99% of total emissions.
Registration and reporting requirements will also be streamlined, and companies will be able to keep importing while waiting for approval.
On paper, this sounds like common sense. Why bury companies in paperwork when the goal is to cut emissions? But simplification comes with risks. Exemptions, even small ones, create gaps that can be exploited. Streamlined reporting might mean less scrutiny. And once loopholes open, closing them is much harder.
The bigger picture is about integrity. CBAM is not just a technical tool, it is a signal to the world that Europe’s climate policies have teeth. If simplification makes CBAM easier to use without weakening it, that is a success. If it softens the mechanism’s enforcement or lets emissions slip through unnoticed, it risks becoming an elegant but empty gesture. The 50-tonne exemption is a perfect example of this tension: is it smart policymaking or a concession that chips away at the mechanism’s strength?
The battle over sustainability reporting
The third major development this week is less visible but arguably just as important: the future of the European sustainability reporting standards (ESRS). On 30 September 2025, the European Financial Reporting Advisory Group (EFRAG) closed a public consultation on proposed reforms to these standards (GlobalCapital, Sept 2025).
The ESRS defines how companies must report their environmental and social impact, including greenhouse gas emissions, biodiversity impacts, and working conditions. These rules fall under the corporate sustainability reporting directive (CSRD), which is designed to make corporate sustainability transparent. If you want to understand how the CSRD works, you can find a good overview here.
Many businesses, especially small and medium-sized ones, argue that the current reporting requirements are too burdensome. The EU’s answer is, once again, simplification. The idea is to make reporting less costly and more manageable. That sounds fair, but the risk is clear: simplification could also mean weakening disclosure. If companies are allowed to report less, or in vaguer terms, it becomes harder for investors, regulators, and the public to hold them accountable.
Transparency is not a bureaucratic nicety, it is the backbone of enforcement. Without it, even the strongest climate laws become unenforceable because no one can tell whether they are being followed. If the ESRS reform ends up reducing disclosure obligations too much, it could hollow out one of the Green Deal’s core principles: that climate action must be measurable, verifiable, and public.
For the end
It is easy to focus on the flaws, the delays, and the political compromises that shape the European Green Deal, and they do exist. But none of them erase a deeper truth: despite its imperfections, the Green Deal remains the most comprehensive and tangible attempt by any group of countries to transform their economies and societies for a sustainable future. It builds on the vision of the UN 2030 Agenda and the Sustainable Development Goals, translating their global ambitions into binding regional policies that guide governments, reshape industries, and influence trade. It is far from perfect, but its scale and ambition are unmatched, and if Europe can rise to the tests of ambition, integrity, and accountability, the Green Deal could become one of the most consequential collective projects in human history.