With the European Green Deal, the EU wanted to gradually make industry more efficient from 2019 and climate-neutral by 2050.
But the project is under enormous pressure, not least because of the conservative EPP (European People’s Party) faction in the European Parliament, which is winning majorities with the help of right-wing extremist parties.
Farewell to sustainable supply chains and reporting requirements
The Green Deal consists of two central instruments: the obligation for companies to report on their own ecological footprint and the EU Supply Chain Directive. So far this has been done by companies with more than 250 employees, around 50,000 of them in the EU.
However, it is possible that in the future this will only be mandatory for large companies with a turnover of several hundred million euros and no longer for small and medium-sized companies, the so-called SMEs. Corporations and companies complain that these are regulations that create bureaucracy and consume too many resources.
Critics claim that reducing measures would lead to less transparency in informing companies or investors who want to put money into sustainable practices and avoid business models that are environmentally harmful or ethically unacceptable.
The European Central Bank (ECB) has already warned that removing these reports could lead to a regulatory imbalance. A letter to the Commission stressed that climate change has a profound impact on price stability and that a sufficiently robust database must be created to address financial risks.
From the ECB’s perspective, this database would be at risk if the number of reporting points were reduced by up to 80 percent, as currently provided for in the so-called omnibus package.
Less control in supply chains
The supply chain law was also weakened with the passage of the so-called omnibus simplification package. Previously, thousands of large companies in high-risk sectors such as textiles, fishing and mining that produce for the EU market had to be subject to such a law.
The aim is for these companies to identify, contain and end human rights and environmental violations along the entire supply chain. This goal has now been significantly weakened.
The rules only apply to multinational companies with more than 5,000 employees and a turnover of at least 1.5 billion euros. Victims of human rights and environmental violations in the supply chain no longer have the right to sue. In addition, companies are no longer required to submit their own climate strategies as initially planned.
EU products and deforestation
The sale of products such as tea, coffee, soy and beef should only be allowed in the EU if it can be proven that no forests were cut down to produce them. The 27 EU member states agreed on this in 2023.
The aim was to protect forests, especially in regions with intensive agriculture such as Brazil and Indonesia, and to hold companies accountable. But the entry into force of the new regulations has been postponed to the end of 2026.
The Food and Agriculture Organization of the United Nations estimates that around 420 million hectares of forest (an area larger than the EU) were lost to deforestation between 1990 and 2020. Consumption in the EU is responsible for around 10 percent of global deforestation.
Around a third of the entire EU budget goes to agriculture, the majority of it in the form of subsidies. European regulations for more sustainable production are a problem, especially for large agricultural operations.
For example, after protests from farmers, the EU did not adopt stricter rules for the use of pesticides in 2023 and 2024. In addition, there are a number of proposals aimed at simplifying bureaucracy for farmers and deregulating the agricultural sector: controls on environmental standards will be limited to a maximum of one per year. Many more natural landscapes across Europe should be allowed to be converted into farmland, or small farms with up to ten hectares of land should be given access to subsidies without having to comply with certain environmental standards.
In short: EU farms will have to contribute less to the environment in the future, even though agriculture has a significant impact on the climate.
(rmr/ms)
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