The European Union is postponing key environmental regulations and reducing compliance requirements as it prioritises industrial competitiveness and strategic independence. While long-term climate targets remain in place, the bloc is changing how it plans to achieve them.
The European Green Deal is giving way to a new political emphasis on the Clean Industrial Deal. Under European Commission President Ursula von der Leyen’s second mandate, Brussels is increasingly focused on keeping European industries competitive while pursuing decarbonisation in a changing geopolitical environment.
Strategic independence has become an urgent priority, particularly as energy security and international trade tensions reshape Europe’s economic outlook. The shift reflects changing political balances in both the European Council and the European Parliament, where centre-right and right-wing parties have gained influence.
Variable parliamentary coalitions involving the European People’s Party (EPP), the European Conservatives and Reformists (ECR), the Patriots for Europe and other nationalist groups have helped drive the change. The Commission has also become more responsive to demands from the EPP.
Rather than formally abandoning its long-term environmental objectives, the EU is increasingly revising the timetable, scope and implementation of the measures designed to achieve them.
Methane rules delayed until 2030
The latest sign of the shift came in Strasbourg, where the European Parliament voted to postpone by three years, from 2027 to 2030, the implementation of rules requiring importers of oil, gas and coal to monitor and report methane emissions. The delay goes further than the European Commission’s original proposal.
The measure is intended to address concerns from energy importers that they may struggle to comply with the new requirements amid mounting pressure on energy markets and soaring prices linked to the conflict in the Middle East.
Pressure from the United States, Gulf countries and several EU member states has also played a role in the debate.
The amendment was backed by the EPP and the ECR, which includes Italy’s Brothers of Italy party, as well as the far-right Patriots for Europe group, home to Italy’s League and Marine Le Pen’s National Rally, and the Europe of Sovereign Nations group, which includes Germany’s Alternative for Germany (AfD) and the party associated with Roberto Vannacci.
Most socialist, liberal and Green lawmakers opposed the three-year postponement.
Dispute over the EU carbon market
A week earlier, EU leaders clashed over the future of the bloc’s carbon pricing system at a summit in Brussels.
Italy and Poland led a group of countries, including the Czech Republic, Slovakia and Hungary, calling for a weakening of carbon market rules and a delay to the introduction of the EU Emissions Trading System 2 (ETS2) from 2028 to 2030.
The new system is designed to cover emissions from building heating and road transport fuels.
A rival group, led by Nordic countries and supported by Germany, the Netherlands, France and Spain, defended the existing framework. These governments argued that maintaining predictable carbon pricing signals is important for investment in green technologies.
The dispute ended in a compromise. Although the latter group resisted calls to weaken the system, EU summit conclusions included an invitation to update the assessment of ETS2’s overall impacts.
Automotive rules face a major shift
The EU continues to pursue vehicle electrification as a means of reducing dependence on fossil fuels, but the planned phase-out of new petrol and diesel cars by 2035 has been effectively diluted under a provisional agreement involving the EPP, Liberals and Socialists, following an understanding between France and Germany.
Under the proposed arrangement, the required reduction in tailpipe emissions from new cars would fall from 100% to 87.5% compared with 2021 levels.
The agreement would also introduce a new category of vehicles powered exclusively by renewable fuels from 2030, known as VEEV. Italian Forza Italia lawmaker Massimiliano Salini described the measure as a major victory for Italy.
The changes reflect the growing pressure on European policymakers to balance emissions reduction targets with the economic challenges facing the continent’s automotive industry.
Deregulation and the Omnibus packages
The European Commission has proposed 12 Omnibus packages as part of a broader legislative simplification strategy aimed at reducing bureaucracy and strengthening competitiveness.
The initiatives cover a range of areas, including sustainability reporting, corporate due diligence requirements, digital regulation and environmental legislation.
The objective is to reduce administrative burdens on businesses, particularly companies concerned about the costs of complying with increasingly complex EU rules.
Critics of the broader shift have raised concerns about the potential consequences for environmental safeguards, while supporters argue that regulatory simplification is necessary to help European companies compete internationally.
Deforestation regulation pushed back
The EU’s deforestation regulation has also been revised, with deadlines and administrative requirements scaled back while its main environmental prohibitions remain in place.
The law’s implementation, initially scheduled to begin at the end of 2024, has been postponed until the end of 2026 to ease the burden on businesses.
The delay adds to a growing list of adjustments to the EU’s environmental policy framework.
Taken together, the changes point to a significant shift in the bloc’s priorities. Climate neutrality remains a long-term objective, but industrial competitiveness, energy security and the cost of compliance are playing a greater role in determining the pace and design of European environmental policy.
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