It was the crown jewel of a climate agenda that defined Ursula von der Leyen’s first term as Commission president. But a little over two years after it was enacted, the European Union’s 2035 ban on gasoline-powered cars is dead. Its killers: Germany, home of Europe’s largest car industry, and the center-right European People’s Party, the pro-business political family to which von der Leyen and German Chancellor Friedrich Merz belong. It was their pressure that forced the Commission’s hand, after Berlin went from potentially abstaining on a vote to undercutting the entire combustion engine ban — all within three weeks.  Under the new proposal, the ban would be replaced by a target to reduce emissions by 90 percent in all cars sold after 2035. That means a range of vehicles will be part of the mix long past 2035, including pure combustion engines and plug-in hybrids that have both a combustion engine and an electric motor —  as long as they are offset with made-in-EU green steel and alternative fuels derived from non-fossil sources. Germany and the EPP argued the outright ban constrained the ability of European automakers to compete and took the freedom of choice away from consumers.  “Six months ago, it was unthinkable that the Commission would make this course correction,” an EU diplomat said, calling Germany’s “decisive intervention” a game changer in the fate of the law. “The ideology of pure electric is ending.”  After winning the majority of seats in the European Parliament in 2024, EPP chief Manfred Weber, also from Germany, said overturning the ban would be his top priority in the new era.  Weber claimed victory on Tuesday, calling the reformed legislation cutting the 2035 emissions target from 100 percent to 90 percent a “massive reduction.”   “We only can win the fight against climate change if we combine it with an economically reasonable approach. The combustion engine is allowed to be sold in the European Union after 2035,” he told a Tuesday press conference ahead of the announcement.  Cars account for 16 percent of EU emissions, making the ban an important — and certainly the most visible — pillar of the EU’s climate policy of reducing net greenhouse gas emissions to zero by 2050. By the Commission’s own calculations, dropping the emissions target to 90 percent means that 25 percent of the cars sold after 2035 would emit CO2, equivalent to roughly 2.6 million vehicles. The new targets are part of a broader automotive package put forward by the European Commission on Tuesday that included a new regulation mandating zero-emissions corporate fleet targets for each EU country, a battery booster to increase supply, and a regulatory red-tape cutting measure that introduces a new small-car initiative.  German Chancellor Merz, who also advocated reversing the ban in his bid for office, took a more measured tone, calling the revised ban “a clear signal” that it is the right way to “better align climate targets, market realities, companies and jobs.| Kay Nietfeld/Getty Images) The combined measures are meant to boost Europe’s automakers, which are facing a trade war courtesy of U.S. President Donald Trump, stiff competition from Chinese incumbents with high-tech electric vehicles, and stagnant sales across the bloc.  German Chancellor Merz, who also advocated reversing the ban in his bid for office, took a more measured tone, calling the revised ban “a clear signal” that it is the right way to “better align climate targets, market realities, companies and jobs.” For months Merz had tried to corral his governing coalition — which combines the conservative Christian Democrats and the center-left Social Democrats — into a common position on the ban. While the CDU pushed hard for it to be overturned, the SPD wanted to hold the line. Ultimately the conservatives won, putting forward a request for regulation that walks a line between industrial competitiveness and protecting the climate. NO ONE’S HAPPY While the Commission calls it a balanced approach that still paves the way for electric vehicles to take over from CO2-emitting cars, political groups across the spectrum call it a disaster — albeit for different reasons.  The left says reversing the ban will deal a blow to the climate and yet fail to give Europe’s automakers a competitive boost.  “The real problem facing Europe’s car industry is not a law that takes effect in 10 years. It is the collapse of European car sales in China and the steady global decline of combustion-engine markets,” said German Greens MEP Michael Bloss. “Continuing to bet on combustion engines is not an industrial strategy — it is a failure of one.” For the far right, meanwhile, the measures don’t go far enough. MEP Volker Schnurrbusch, a member of Germany’s opposition AfD party, said in a debate in the Parliament that the real issue is the Commission “dictating” what form of transport consumers use. The European Conservatives and Reformists, meanwhile, called the reformed 2035 law a missed opportunity that “falls short of providing the bold actions” needed to make the sector more globally competitive. The differing views on the ban’s reversal will continue to be heard in negotiations among the EU’s institutions, particularly in the Council where EU capitals will battle it out with Cyprus — a small country with no automotive sector — acting as referee. Already, France is gearing up for a fight. “The negotiations are just beginning,” a Paris officials said, adding that allowing combustion engine cars to be sold past 2035 is a red line for the country, even as it gets its desired European preference requirements. Behind the scenes, the automotive sector will continue to lobby to undercut the regulation even more. “The announced measures to mandate the greening of corporate fleets risk running counter to the necessary market and incentive-based approach,” EU car lobby ACEA said in a statement.   Yet that is exactly what the Commission is hoping, with multiple industry officials telling POLITICO that the corporate fleets measure is meant to act as a backstop for the gutting of the combustion engine ban. Climate Commissioner Wopke Hoekstra admitted as much in his remarks before the Parliament Tuesday evening.   “Corporate fleets will steer the clean transition and will help the automakers meet their targets,” he said. The proposal must now be debated by member countries and in the European Parliament.

High energy prices, risks on CBAM enforcement and promotion of lead markets, as well as increasing carbon costs are hampering domestic and export competitiveness with non-EU producers. The cement industry is fundamental to Europe’s construction value chain, which represents about 9 percent of the EU’s GDP. Its hard-to-abate production processes are also currently responsible for 4 percent of EU emissions, and it is investing heavily in measures aimed at achieving full climate neutrality by 2050, in line with the European Green Deal. Marcel Cobuz, CEO, TITAN Group  “We should take a longer view and ensure that the cement industry in EU stays competitive domestically and its export market shares are maintained.” However, the industry’s efforts to comply with EU environmental regulations, along with other factors, make it less competitive than more carbon-intensive producers from outside Europe. Industry body Cement Europe recently stated that, “without a competitive business model, the very viability of the cement industry and its prospects for industrial decarbonization are at risk.” Marcel Cobuz, member of the Board of the Global Cement and Concrete Association and CEO of TITAN Group, one of Europe’s leading producers, spoke with POLITICO Studio about the vital need for a clear policy partnership with Brussels to establish a predictable regulatory and financing framework to match the industry’s decarbonization ambitions and investment efforts to stay competitive in the long-term. POLITICO Studio: Why is the cement industry important to the EU economy?  Marcel Cobuz: Just look around and you will see how important it is. Cement helped to build the homes that we live in and the hospitals that care for us. It’s critical for our transport and energy infrastructure, for defense and increasingly for the physical assets supporting the digital economy. There are more than 200 cement plants across Europe, supporting nearby communities with high-quality jobs. The cement industry is also key to the wider construction industry, which employs 14.5 million people across the EU. At the same time, cement manufacturers from nine countries compete in the international export markets. PS: What differentiates Titan within the industry?  MC: We have very strong European roots, with a presence in 10 European countries. Sustainability is very much part of our DNA, so decarbonizing profitably is a key objective for us. We’ve reduced our CO2 footprint by nearly 25 percent since 1990, and we recently announced that we are targeting a similar reduction by 2030 compared to 2020. We are picking up pace in reducing emissions both by using conventional methods, like the use of alternative sources of low-carbon energy and raw materials, and advanced technologies. TITAN/photo© Nikos Daniilidis We have a large plant in Europe where we are exploring building one of the largest carbon capture projects on the continent, with support from the Innovation Fund, capturing close to two million tons of CO2 and producing close to three million tons of zero-carbon cement for the benefit of all European markets. On top of that, we have a corporate venture capital fund, which partners with startups from Europe to produce the materials of tomorrow with  very low or zero carbon. That will help not only TITAN but the whole industry to accelerate its way towards the use of new high-performance materials with a smaller carbon footprint. PS: What are the main challenges for the EU cement industry today?  MC: Several factors are making us less competitive than companies from outside the EU. Firstly, Europe is an expensive place when it comes to energy prices. Since 2021, prices have risen by close to 65 percent, and this has a huge impact on cement producers, 60 percent of whose costs are energy-related. And this level of costs is two to three times higher than those of our neighbors. We also face regulatory complexity compared to our outside competitors, and the cost of compliance is high. The EU Emissions Trading System (ETS) cost for the cement sector is estimated at €97 billion to €162 billion between 2023 and 2034. Then there is the need for low-carbon products to be promoted ― uptake is still at a very low level, which leads to an investment risk around new decarbonization technologies. > We should take a longer view and ensure that the cement industry in the EU > stays competitive domestically and its export market shares are maintained.” All in all, the playing field is far from level. Imports of cement into the EU have increased by 500 percent since 2016. Exports have halved ― a loss of value of one billion euros. The industry is reducing its cost to manufacture and to replace fossil fuels, using the waste of other industries, digitalizing its operations, and premiumizing its offers. But this is not always enough. Friendly policies and the predictability of a regulatory framework should accompany the effort. PS: In January 2026, the Carbon Border Adjustment Mechanism will be fully implemented, aimed at ensuring that importers pay the same carbon price as domestic producers. Will this not help to level the playing field? MC: This move is crucial, and it can help in dealing with the increasing carbon cost. However, I believe we already see a couple of challenges regarding the CBAM. One is around self-declaration: importers declare the carbon footprint of their materials, so how do we avoid errors or misrepresentations? In time there should be audits of the importers’ industrial installations and co-operation with the authorities at source to ensure the data flow is accurate and constant. It really needs to be watertight, and the authorities need to be fully mobilized to make sure the real cost of carbon is charged to the importers. Also, and very importantly, we need to ensure that CBAM does not apply to exports from the EU to third countries, as carbon costs are increasingly a major factor making us uncompetitive outside the EU, in markets where we were present for more than 20 years. > CBAM really needs to be watertight, and the authorities need to be fully > mobilized to make sure the real cost of carbon is charged to the importers.” PS: In what ways can the EU support the European cement industry and help it to be more competitive? MC: By simplifying legislation and making it more predictable so we can plan our investments for the long term. More specifically, I’m talking about the revamping of the ETS, which in its current form implies a phase-down of CO2 rights over the next decade. First, we should take a longer view and ensure that the cement industry stays competitive and its export market shares are maintained, so a policy of more for longer should accompany the new ETS. > In export markets, the policy needs to ensure a level playing field for > European suppliers competing in international destination markets, through a > system of free allowances or CBAM certificates, which will enable exports to > continue.” We should look at it as a way of funding decarbonization. We could front-load part of ETS revenues in a fund that would support the development of technologies such as low-carbon materials development and CCS. The roll-out of Infrastructure for carbon capture projects such as transport or storage should also be accelerated, and the uptake of low-carbon products should be incentivized. More specifically on export markets, the policy needs to ensure a level playing field for European suppliers competing in international destination markets, through a system of free allowances or CBAM certificates, which will enable exports to continue. PS: Are you optimistic about the future of your industry in Europe?  MC: I think with the current system of phasing out CO2 rights, and if the CBAM is not watertight, and if energy prices remain several times higher than in neighboring countries, and if investment costs, particularly for innovating new technologies, are not going to be financed through ETS revenues, then there is an existential risk for at least part of the industry. Having said that, I’m optimistic that, working together with the European Commission we can identify the right policy making solutions to ensure our viability as a strategic industry for Europe. And if we are successful, it will benefit everyone in Europe, not least by guaranteeing more high-quality jobs and affordable and more energy-efficient materials for housing ― and a more sustainable and durable infrastructure in the decades ahead. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Titan Group * The advertisement is linked to policy advocacy around industrial competitiveness, carbon pricing, and decarbonization in the EU cement and construction sectors, including the EU’s CBAM legislation, the Green Deal, and the proposed revision of the ETS. More information here.

BRUSSELS — Europe’s most energy-intensive industries are worried the European Union’s carbon border tax will go too soft on heavily polluting goods imported from China, Brazil and the United States — undermining the whole purpose of the measure. From the start of next year, Brussels will charge a fee on goods like cement, iron, steel, aluminum and fertilizer imported from countries with weaker emissions standards than the EU’s. The point of the law, known as the Carbon Border Adjustment Mechanism, is to make sure dirtier imports don’t have an unfair advantage over EU-made products, which are charged around €80 for every ton of carbon dioxide they emit. One of the main conundrums for the EU is how to calculate the carbon footprint of imports when the producers don’t give precise emissions data. According to draft EU laws obtained by POLITICO, the European Commission is considering using default formulas that EU companies say are far too generous. Two documents in particular have raised eyebrows. One contains draft benchmarks to assess the carbon footprint of imported CBAM goods, while the second — an Excel sheet seen by POLITICO — shows default CO2 emissions values for the production of these products in foreign countries. These documents are still subject to change. National experts from EU countries discussed the controversial texts last Wednesday during a closed-door meeting, and asked the Commission to rework them before they can be adopted. That’s expected to happen over the next few weeks, according to two people with knowledge of the talks. Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. For example, some steel products from China, Brazil and the United States have much lower assumed emissions than equivalent products made in the EU, according to the tables. Ola Hansén, public affairs director of the green steel manufacturer Stegra, said he had been “surprised” by the draft default values that have been circulating, because they suggest that CO2 emissions for some steel production routes in the EU were higher than in China, which seemed “odd.” “Our recommendation would be [to] adjust the values, but go ahead with the [CBAM] framework and then improve it over time,” he said. Antoine Hoxha, director general of industry association Fertilizers Europe, also said he found the proposed default values “quite low” for certain elements, like urea, used to manufacture fertilizers. “The result is not exactly what we would have thought,” he said, adding there is “room for improvement.” But he also noted that the Commission is trying “to do a good job but they are extremely overwhelmed … It’s a lot of work in a very short period of time.” Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. | Photo by VCG via Getty Images While a weak CBAM would be bad for many emissions-intensive, trade-exposed industries in the EU, it’s likely to please sectors relying on cheap imports of CBAM goods — such as European farmers that import fertilizer — as well as EU trade partners that have complained the measure is a barrier to global free trade. The European Commission declined to comment. DEFAULT VERSUS REAL EMISSIONS Getting this data right is crucial to ensure the mechanism works and encourages companies to lower their emissions to pay a lower CBAM fee. “Inconsistencies in the figures of default values and benchmarks would dilute the incentive for cleaner production processes and allow high-emission imports to enter the EU market with insufficient carbon costs,” said one CBAM industry representative, granted anonymity to discuss the sensitive talks. “This could result in a CBAM that is not only significantly less effective but most likely counterproductive.” The default values for CO2 emissions are like a stick. When the legislation was designed, they were expected to be set quite high to “punish importers that are not providing real emission data,” and encourage companies to report their actual emissions to pay a lower CBAM fee, said Leon de Graaf, acting president of the Business for CBAM Coalition. But if these default values are too low then importers no longer have any incentive to provide their real emissions data. They risk making the CBAM less effective because it allows imported goods to appear cleaner than they really are, he said. The Commission is under pressure to adopt these EU acts quickly as they’re needed to set the last technical details for the implementation of the CBAM, which applies from Jan. 1. However, de Graaf warned against rushing that process. On the one hand, importers “needed clarity yesterday” because they are currently agreeing import deals for next year and at the moment “cannot calculate what their CBAM cost will be,” he said. But European importers are worried too, because once adopted the default emission values will apply for the next two years, the draft documents suggest. The CBAM regulation states that the default values “shall be revised periodically.” “It means that if they are wrong now … they will hurt certain EU producers for at least two years,” de Graaf said.

BRUSSELS — For six years, the European Union’s efforts to fight climate change have been on an upward swing. That came to an end on Wednesday morning in messy, exhausted scenes.  After a marathon meeting that ran through Tuesday night and eventually ended a little after 9 a.m. the next morning, a majority of the bloc’s 27 governments agreed on new targets to cut pollution — but only by weakening existing laws and slowing domestic efforts designed to cut down on that very same pollution.  The compromise was met with relief by many countries and European Commission officials, who had feared an embarrassing collapse that would have hamstrung the EU on the eve of the COP30 U.N. climate talks in Brazil starting Thursday. But it also underscored a swing in political momentum. After half a decade of green victories on climate policy, a much more skeptical group of countries and parties now has the upper hand. In an interview just after the talks ended, the Commission’s climate chief Wopke Hoekstra hailed the EU’s continuing “leadership role” on climate issues. But the commissioner was candid about the political and economic realities — high energy costs, the rise of right-wing populists and declining industrial confidence — that had strengthened critics of the green agenda. The EU was “staying the course” on fighting climate change, he told POLITICO, but added “it would be foolish to use the recipe of the past. We’re facing massive change, so we need to adapt to that change.” Ministers also agreed on a target for 2035 — a requirement under the terms of the 2015 Paris Agreement that was due to be delivered earlier this year in advance of the COP30 talks. The ministers were unable to agree to a single number, instead promising a nonbinding cut between 66.25 and 72.5 percent. The final deal on the binding 2040 goal came up short of the 90 percent cut in domestic pollution below 1990 levels, which Commission President Ursula von der Leyen had made the key green pledge in her reelection campaign.  Instead, ministers on Wednesday agreed an 85 percent cut in domestic emissions by 2040. Governments intend to achieve the remaining 5 percentage points by paying other countries to reduce pollution on the bloc’s behalf, a system of purchases known as carbon credits.  The deal also opened the door to outsourcing additional efforts as part of a wide-ranging revision clause that will see the Commission tasked with considering amending the target every five years depending on factors such as energy prices or economic troubles. “Embarrassing and short sighted,” was the assessment of Diederik Samsom, the former top-ranking Commission official who was a primary architect of the European Green Deal policy package during von der Leyen’s first mandate — though he said it was unlikely the carbon credits would be used as they would cost just as much as cutting emissions at home, but without the added benefits of investment and innovation. “The Green Deal still holds, since its rationale is largely economic … but the lack of political courage amongst European ministers is worrying,” said Samsom, who also served as Hoekstra’s chief of staff for a few months. These major gifts to countries like France, which had pushed for the credit system, were still not enough to strike a deal on Wednesday. Italy, supported by Poland and Romania, led a blocking minority that refused to budge until they were granted key concessions on existing climate laws.  To win them over, ministers also agreed to delay by one year the rollout of the EU’s carbon pricing system for heating and fuel emissions, known as ETS2. And they asked to extend the use of biofuels and other low-carbon fuels in transport in the future, which could weaken the agreed 2035 ban on new combustion-engine cars.  Watering down existing tools for cutting emissions in order to land a deal on a future target created a challenge all of its own, said Simone Tagliapietra, a senior fellow at the Bruegel think tank. “The target is very ambitious, and we need all tools to deliver on it. Dilemma is how to get there.” Those tweaks came on top of concessions already granted in technical talks over the past few weeks, which include permitting heavy industry to pollute more and revising the target downward if the EU’s forests absorb less carbon dioxide than expected.  “Instead of climate protection, the ministers end up with political self-deception,” said Michael Bloss, a Greens MEP from Germany. Poland was one of the key holdouts and ultimately refused to vote in favor of the target even though it was granted a delay in the ETS2, which Secretary of State for Climate Krzysztof Bolesta said “was one of our main demands.” Poland was accused of holding hostage the 2035 climate target, which needed unanimous support, over the delay on ETS2, said three diplomats involved in the negotiations. A Polish official said any discussions on the 2035 goal and the postponement of the ETS2 were part of a “package deal” sought by several countries. These officials were granted anonymity to disclose the details of the talks. But even with that concession, the target was still the lowest level of ambition. “We were forced to accept the lower end of the range to prevent certain countries from blocking this agreement,” said Monique Barbut, the French environment minister.  But that shouldn’t be interpreted as a sign the EU is no longer a global climate leader, according to Barbut. “We have absolutely nothing to be ashamed of,” she said. Hoekstra framed the deal as a new phase of pragmatic climate policymaking that incorporated the views of traditionally resistant countries, rather than sidelining them. He argued the past approach had failed to protect the bloc from industrial decline and dependence on countries such as China.  “In the past, we have been gambling with our independence and our competitiveness in a way that, frankly speaking, we should not have,” Hoekstra said.

BRUSSELS — Europe’s center right has two weeks to decide on the strategy that will define its next four years in the European Parliament: Dilute its ambition and stick with traditional mainstream allies — or work with the far right to get the job done.   While governments in EU capitals grapple with the rise of populists, and centrist parties struggle to hold their ground, pan-European groups in the Parliament are confronting similar challenges. Last week’s failure to pass a landmark law aimed at cutting red tape underlined how little room for maneuver the center still has. The center-right European People’s Party “still has the choice between working with the far right that wants to demolish Europe, or a stable pro-European coalition,” Bas Eickhout, co-chair of the Greens, considered one of the EPP’s centrist allies, told POLITICO. After the EPP’s failed attempt last week to pass a bill cutting green reporting obligations for companies ― because some center-left MEPs rebelled against their party line ― the far-right Patriots for Europe group called on the EPP to abandon its old allies from the center-left Socialists and Democrats (S&D), the liberal Renew Europe group and the Greens. The Patriots want the EPP to make a deal with them instead, in order to pass the bill when lawmakers vote again on Nov. 12. “I think that a number of EPP members realized that they had made a mistake in allying themselves with the architects of the Green Deal,” said Pascale Piera, the Patriots lawmaker leading work on this file. EU leaders are pressuring the Parliament to move the file forward within the next month so Brussels can prove it’s capable of cutting red tape for businesses and boost its ailing economy.   The debate over the law is forcing a reckoning for the EPP, which must decide whether to uphold the so-called cordon sanitaire — the unwritten rule dictating that groups in the center don’t work with the far right — or declare the centrist coalition is failing and throw in their lot with the other side of the aisle. That could cause a seismic rupture in the way politics has always been done in Brussels. RACE FOR LEGITIMACY  Political groups in the Parliament are extremely divided over how to implement the new Brussels simplification agenda. While groups to the right of the hemicycle call for a major rollback of EU rules — particularly environmental laws, which they see as the culprit for stagnating growth — those on the left are fighting to preserve the rules they helped craft in the previous mandate. The European Commission put forward its omnibus simplification bill because it wants to reduce reporting obligations for companies under the bloc’s corporate sustainability disclosure and supply chain transparency rules, core parts of the European Green Deal.  It’s the first in a series of proposals aimed at cutting red tape to boost European competitiveness in the second term of Commission President Ursula von der Leyen, a leading member of the EPP. For weeks leading up to the failed vote in Strasbourg, the EPP had flirted with right-wing and far-right groups. “I think that a number of EPP members realized that they had made a mistake in allying themselves with the architects of the Green Deal,” said Pascale Piera. | Julien De Rosa/Getty Images It negotiated with the Patriots, the far-right Europe of Sovereign Nations (ESN) and the right-wing European Conservatives and Reformists (ECR) groups to get them to back the legislation, only to then use that agreement to persuade the liberals and Socialists to scale back their demands and agree to major cuts to the laws. Although the latter groups agreed, some of the Socialists refused to vote in favor, causing the proposal to be rejected. Lead EPP negotiator Jörgen Warborn called the result “disappointing” and said it was up to the Socialists to clarify their position. ‘RELIABLE MAJORITY’ Even though the centrist coalition failed to pass the bill, the liberals and Social Democrats hope the EPP will keep faith with the center by making enough concessions to get Socialist lawmakers to vote in favor.   “There has to be a text put to a vote that can have a majority in the plenary, and the more reliable majority is EPP with S&D, Renew and the Greens,” Socialists negotiator René Repasi told POLITICO.  “That’s what the final text has to reflect.” But that’s not the direction the right-wing groups hope things will go. For the Patriots’ Piera, the law in its initial form, negotiated with the far right, has enough backing to pass. She said she was “surprised” the EPP abandoned that version. “The EPP will not be able to move further to the left than it has done so far, as the discussions will be public and their core electorate are people who are very attentive to the health of the economic sector,” she said. A Parliament official from the ESN also told POLITICO that the group “will strive for a solution that resembles [the first proposal].” Yet critics fear the precedent that this would set. Lara Wolters, the former Socialist negotiator who quit because of the deal, blamed the “EPP’s refusal to make a fundamental political choice on whether to cooperate as a matter of principle with the groups to the EPP’s right, or those to EPP’s left.” SETTING A PRECEDENT Leaning on the far right to get the bill through “would show a strategic direction for the EPP,” Andreas Rasche, professor of business in society at the Copenhagen Business School told POLITICO, adding this would set a “dangerous precedent” for legislative work going forward. While the right-wing bloc may be able to strike a deal in the Parliament, the S&D’s Repasi warned that the text could change following negotiations with EU countries. Last time the EPP tried to gut an anti-deforestation bill to cut red tape with the support of the far right, EU countries rebuffed the maximalist proposal and the Parliament had to backtrack.   “The rapporteur should keep in mind he still needs a majority for the trilogue results as well,” Repasi said, referring to the final vote to take place in the Parliament following final negotiations with the Commission and EU governments. 

BRUSSELS — The EU is considering allowing its heavy industry to pollute for longer under a new draft proposal aimed at breaking the deadlock on the bloc’s 2040 goal for cutting planet-warming emissions. Under pressure to strike a deal before the COP30 climate summit starting Nov. 10 in Brazil, Denmark, which is steering the talks among EU countries, is opening the door to slowing the EU’s climate efforts. The intention is to win support from the majority of countries to back the target of an 90 percent emissions cut by 2040 compared to 1990 levels. The text, obtained by POLITICO, proposes that the EU assess progress toward achieving the new 2040 climate goal every two years, taking into account “scientific evidence, technological advances and evolving challenges to and opportunities for the EU’s global competitiveness.” The European Commission could then suggest legislative changes, the document adds, meaning Brussels could adjust — and potentially weaken — its target in future. The suggestion comes after EU leaders discussed competitiveness and climate policy at a summit last week and pitched ideas to unlock the stalemate in the negotiations. A number of leaders called on the EU to set pragmatic climate goals and introduce more flexibilities to reach them, something that is now reflected in the new compromise document. But allowing the EU to decelerate its climate efforts could see it miss the 2040 goal, or force it to rely on other instruments to reach it, such as outsourcing more emissions cuts to poorer countries. OFFERING FLEXIBILITIES The Danish presidency proposes to introduce measures to avoid penalizing one sector (such as heavily polluting industries) if other sectors (e.g. forestry, which contributes to sequestering carbon in forests) can’t meet their emissions reduction or absorption targets. The proposal states that “possible shortfalls in one sector would not be at the expense of other economic sectors, notably industrial sectors under the EU [Emissions Trading System].” The document does not propose changing the headline 90 percent emissions cut target as proposed by the Commission in July. But it does raise the possibility of changing how much international carbon offsets — an instrument that allows the EU to outsource emissions cuts abroad — should contribute to achieving the target. The Commission proposed capping their use at 3 percent starting in 2036, but member countries including France and Poland have suggested 5 percent or 10 percent. It’s expected to be a key topic in negotiations this week and next, according to one EU diplomat. The document also states that the bloc’s climate goals should not be pursued at the expense of the EU’s military priorities. When designing new climate legislation, the Commission should take into account “the need to ensure the Union’s and its Member States’ capacity to rapidly increase and strengthen their defensive capacity by addressing possible burdens while maintaining incentives for industrial decarbonisation,” the document reads. The compromise text will now be discussed by EU country envoys on Wednesday and Friday with the aim of allowing environment ministers to strike a deal Nov. 4.

Listen on * Spotify * Apple Music * Amazon Music The EU wants to lend €140 billion in cash from frozen Russian funds to Ukraine; Belgium is afraid it will be the one on the hook for paying it back. That’s just one of the tough topics EU leaders discussed as they gathered in Brussels at a meeting devoted to fighting the external threat from Russian President Vladimir Putin — and the internal threat from the far right.  POLITICO’s Gregorio Sorgi breaks down why lending Russian frozen assets is so tricky, while host Sarah Wheaton catches up with colleagues Zia Weise, Gabriel Gavin, Nick Vinocur and Tim Ross on the ground at the European Council summit to get a handle on how debates over climate, sanctions and deregulation played out. 

EU leaders are in Brussels on Thursday and the agenda is packed. It will dominated by themes that mainstream politicians associate with a fundamental challenge: preventing a scenario in which four or five far-right leaders are sitting around the European Council table a few years from now. They will talk about everything from Ukraine and defense spending to the rising cost of housing, from the green and digital transitions to migration, and from developments in the Middle East to social media regulation and Russia sanctions. Scroll down for the latest news and analysis from our top team of reporters.

BRUSSELS — European Commission President Ursula von der Leyen has pledged to adjust key green laws to secure support for a new climate target.  In a letter to national leaders circulated on Monday, von der Leyen outlined plans to change the EU’s carbon pricing and existing climate targets for forests, among others.  The Commission president’s unusual intervention comes days before leaders are set to debate the EU’s new overarching emissions-reduction target for 2040 at their European Council summit. Governments have been unable to agree on the new target, with several EU countries expressing concern about the economic impact of the bloc’s new and existing climate measures. Leaders will discuss the link between competitiveness and climate on Thursday in Brussels.  In her letter, von der Leyen defends the upcoming target, insists that Europe’s future competitiveness requires a decarbonized economy — and hints that this means leaving some sectors behind.  “If a robust, resilient, sustainable and innovative economy is our goal, then dogmatically clinging to our existing business models, whatever their past successes, is not the solution,” she writes. “For the EU’s economy to take its rightful place in the global economy, we must be among those who are driving the response to the challenges of our time.”  Those challenges include “the scientific reality that we are increasingly putting our prosperity and our social models at risk, while our communities risk becoming uninhabitable,” she adds, while warning that the EU cannot afford complacency given China’s accelerating dominance in clean technologies and raw materials.  Yet von der Leyen also offers several key concessions to leaders, acknowledging that “no one should be able to submit our economic and social fabric to so much tension that it breaks down.”  GREEN DEAL TWEAKS Her Commission has proposed slashing the bloc’s planet-warming emissions by up to 90 percent below 1990 levels by 2040, albeit allowing countries to outsource up to 3 percentage points of this goal by purchasing carbon credits from other nations rather than achieving these reductions with domestic measures.  In her letter, von der Leyen opens the door to an increase in credit use, writing: “Part of the target — 3% in the Commission’s proposal, which ministers will further discuss — can be reached with high-quality international credits. Our domestic target … can be lower than 90%, as long as this is compensated by similar … reductions outside of the EU.”  She also responded to a key demand from governments to adjust the bloc’s new carbon price on transport and heating, plans that were controversial from the beginning as they are expected to lead to higher fuel bills for most consumers.  On Tuesday, she writes, the EU’s climate chief Wopke Hoekstra will announce specific tweaks to the measure, addressing “concerns of too high or volatile prices.” The Commission is looking at a “more robust price stabilisation system” as well as options to provide additional support for households to cope with the increased bills.  On Tuesday, she writes, the EU’s climate chief Wopke Hoekstra will announce specific tweaks to the measure, addressing “concerns of too high or volatile prices.” | Christophe Petit-Tesson/EPA Von der Leyen also said she shared some governments’ concerns about the carbon price the EU currently imposes on heavy-polluting industries such as steel, and promised a “realistic and feasible” future trajectory, without providing details.  She then pointed to upcoming changes in the EU’s targets for how much carbon dioxide is absorbed by forests and soils, known as LULUCF. Several governments have described the current goals as unrealistic, with some pointing to increased wildfires and others to the needs of their forestry industry.  “Already we can see the challenges that several of you are facing …. We are working on pragmatic solutions to alleviate these challenges, within the existing LULUCF Regulation,” von der Leyen writes.  Carbon markets and the LULUCF rules, together with national emissions targets, are the core sub-targets of the bloc’s climate framework.  The letter also reiterates already announced tweaks and plans, such as an accelerated review of the bloc’s combustion engine phaseout, and contains a lengthy annex outlining all the upcoming announcements.

BRUSSELS — European governments will not vote on the bloc’s next climate milestone next Thursday, six diplomats told POLITICO. The decision on the European Union’s new emissions-cutting target for 2040 will now be delayed for at least several weeks, casting doubt on whether the bloc can present its related climate plan for 2035 to the United Nations by the end of September.  EU environment ministers were scheduled to agree on the 2035 and 2040 targets at a meeting on Sept. 18 in Brussels. But Denmark, the country chairing the talks, has now canceled the vote, according to the diplomats, who were granted anonymity to discuss the closed-door talks.  The decision comes after France and Germany joined Poland and Italy in demanding that the vote be postponed until national leaders can have a say on the target, creating a blocking minority. A ministerial discussion will still be held on Thursday to prepare for a debate at leaders’ level. No decision has yet been made on when this discussion would take place. The earliest informal leaders’ meeting is scheduled for Oct. 1 and the next formal summit for Oct. 23.  In total, 11 of 27 countries asked for a delay during a preparatory meeting on Friday, three diplomats said, listing the Czech Republic, Malta, Austria, Slovakia, Romania, Hungary and Latvia besides Italy, France, Germany and Poland.  “It has always been our ambition … to get agreement on an EU target for 2040 as quickly as possible. I have never hidden the fact that it is a difficult task that is politically complicated,” Danish Climate Minister Lars Aagaard said after the meeting.  “I can see that among a sufficient number of member states there is a desire for the heads of government to discuss the matter before those member states are ready to conclude negotiations on the 2040 climate target,” he added.  Some countries, such as Germany, clarified that they want only a discussion but no decision at leaders’ level, with a vote among ministers held at a later date. A leaders’ agreement requires unanimity, raising the threat of a single country vetoing the target. The European Commission has proposed reducing the EU’s emissions by 90 percent below 1990 levels by 2040, but many countries have asked for extra leeway to meet the target. Some governments want to weaken the goal significantly. The delay also raises questions about the EU’s plan to reduce emissions through 2035, a target required under the Paris Agreement reached a decade ago. Ministers were expected to vote on both goals next week, as the bloc intended to derive the 2035 target from the 2040 legislation. As of Friday, there was no clarity on whether the bloc would decide on the U.N.-mandated target next week.  The U.N. has set a late September deadline for the 2035 plans, and the Brazilian presidency of this year’s COP30 climate summit has called on all Paris Agreement signatories to present their targets at a Sept. 24 meeting on the sidelines of the U.N. General Assembly in New York.  Three diplomats said that Denmark told countries they would call a meeting on Tuesday to determine what to do about the 2035 target, telling governments they had three options.  The first, and most drastic choice mentioned by Denmark is to also cancel the vote on the 2035 target scheduled for Thursday — which would mean the EU showing up to the General Assembly “with nothing,” depriving the bloc of the chance to influence the efforts of other major polluters, one of the diplomats said. The second is to postpone only the decision on the 2040 target and agree on the 2035 plan next Thursday, though this would likely result in a weaker-than-expected goal under the Paris Agreement — 66 percent instead of 72.5 percent.  Alternatively, the EU could “bring a statement of intent” to New York with a “temporary” 2035 goal “taking into account adopted and proposed targets,” the diplomat said.  This target would “most likely be expressed as range” and “could be updated once there is agreement on the 2040 target,” the diplomat added.  The Danish negotiating team said that the aim of the Sept. 18 meeting is now “to stabilize the text,” adding that Copenhagen wants countries to reach agreement on both targets “before the end of the year.”  This article has been updated.