Can Europe Still be Green and Competitive? A Legal Perspective on the EU’s Climate Commitments

For years, the European Union (EU) has positioned itself as a global leader in the fight against climate change. The EU has shaped its internal climate agenda and influenced international negotiations through ambitious climate laws, forward-thinking policies, and global advocacy. At the core of this leadership lies a defining goal: reaching net-zero emissions by 2050.

But in 2025, this green vision faces a new challenge. Europe is under mounting pressure to protect its economic competitiveness in a rapidly shifting geopolitical and energy landscape. The Clean Industrial Deal, the EU’s latest policy package, signals this pivot. But can the EU maintain its climate ambitions while boosting industrial power? Or are we seeing the beginning of a legal and political trade-off?

This article explores the evolving relationship between EU climate law and economic competitiveness, asking whether these dual objectives can be reconciled and whether net-zero emissions by 2050 is still a realistic legal target.

A Three-Pillar Framework: Policy, Law, and Governance

The EU’s climate action is built on three pillars: policy, law, and governance. These pillars have shaped its response to the Paris Agreement and provided legal tools to drive environmental transformation.

1. Policy: A Vision for Green Growth

The cornerstone of the EU climate policy is the 2019 European Green Deal, a strategic roadmap for turning the EU into the world’s first climate-neutral continent. It’s a soft law instrument that articulates a vision of a modern, resource-efficient economy where economic growth is decoupled from resource use. The strategy does not imply eliminating all emissions, but it aims to balance emissions with carbon removals through nature-based solutions and emerging technologies.

The Commission’s 2030 Climate Target Plan and its subsequent updates strengthen this commitment, aligning emission reduction objectives with wider economic reforms. The plan sets bold long-term goals, including achieving climate neutrality by 2050. It also outlines key intermediate targets, such as a 55% reduction in greenhouse gas emissions by 2030 compared to 1990 levels (with a 90% cut by 2040), a 40% share of renewable energy in the EU’s energy mix, and a 36–39% improvement in energy efficiency across both final and primary consumption, all paving the way for continued progress toward the overarching objective.

2. Law: Turning Targets into Obligations

The European Climate Law serves as the legal foundation for the EU’s climate initiatives, making the 2050 net-zero target legally binding. It also mandates an interim target: reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.

Supporting this, the Fit for 55 package includes laws reforming:

– The EU Emissions Trading System (ETS)

– The Effort Sharing Regulation (ESR)

– The LULUCF Regulation (Land Use, Land-Use Change, and Forestry)

These laws are reinforced by the Governance Regulation, which ensures coherence, reporting, and planning across all Member States. Critically, oversight is provided by the European Scientific Advisory Board on Climate Change, which offers independent evaluations, creating a legal obligation for the EU to align its policies with science.

3. Governance: Integrating Energy and Climate

Governance plays a crucial role in coordinating the EU’s climate architecture. The Governance of the Energy Union and Climate Action Regulation aligns national energy and climate plans with EU-level objectives, focusing on five dimensions:  energy security, internal energy markets, energy efficiency, decarbonisation, and research and innovation. Although competitiveness is not its main focus, the governance framework still aims to ensure that climate action is credible, consistent, and integrated across sectors.

Is Net-Zero Still Achievable?

While the legal framework is robust, serious doubts remain about whether the EU is on track to meet its net-zero commitment.

First, critics point to significant gaps in clarity and enforcement, especially regarding the role of carbon removals. The EU’s growing reliance on carbon offset technologies, such as carbon capture and storage, risks fostering an “emit now, compensate later” mindset. This could delay immediate emissions reductions and contribute to long-term environmental degradation, including deforestation and biodiversity loss.

Second, the fairness of the transition is in question. The “Gilets Jaunes” protests in France demonstrated the social backlash that can emerge when climate policy appears unfair, disconnected or insensitive to public needs. EU regulations, while targeting climate concerns, can have serious social impacts on employment, energy prices, and regional economies. For instance, the progressive withdrawal from fossil fuels may lead to job losses in carbon-intensive industries, and the green jobs that emerge in their place may not offer equivalent conditions, wages, or accessibility.

This social dimension is especially relevant for women and underrepresented groups, who often face structural barriers to entering green sectors. Legal protections and transition support mechanisms are in place, such as the Just Transition Mechanism, but many argue these are still insufficient.

The Clean Industrial Deal: A new direction?

The launch of the Clean Industrial Deal (CID) in February 2025 marked a significant shift in EU priorities. Developed in response to the Draghi Report on European competitiveness, the CID presents a strategy for making Europe a global hub for clean, competitive industries.

The CID rests on several foundational pillars. It prioritises ensuring access to affordable clean energy while also stimulating demand for decarbonised products across key sectors. It aims to attract significant public and private investment to accelerate the green transition and ensure access to critical raw materials for technologies like batteries and renewable energy systems. The strategy also promotes circular economy practices, encouraging resource efficiency and waste reduction. In parallel, it seeks to establish fair competition with non-EU markets by addressing carbon leakage and trade imbalances. Lastly, it emphasises the importance of upskilling the workforce and preparing citizens for emerging roles in the clean economy.

At first glance, the CID might seem to weaken the EU’s focus on climate justice and long-term environmental goals. However, it explicitly places decarbonisation and circularity at the heart of its economic vision. It frames green transformation as a competitive advantage, not a trade-off. But this raises deeper legal questions: can existing EU competition law accommodate these new priorities?

Legal Compatibility: Climate Law and Competition Law

Aligning climate objectives with EU competition law presents a complex challenge. While climate law drives long-term transformation, competition law, rooted in the Treaty on the Functioning of the EU, aims to prevent market distortion and protect consumer welfare. However, effective green industrial policies often require state interventions, such as subsidies or carbon pricing, which can conflict with competition rules. Though competition law has shown some flexibility, particularly in recent state aid rules for green technology, it still lacks a robust framework for integrating environmental goals.

To ensure climate ambitions are not sidelined, future legal reforms must recognise sustainability as a legitimate consideration in competition cases and promote better coordination between these legal fields. In this context, the CID seeks to enhance Europe’s industrial competitiveness and embed sustainability more deeply into its legal and economic governance. It aims to recognise environmental objectives as legitimate factors in competition law, a critical step for effectively aligning the EU’s climate and industrial ambitions.

Holding the Legal Line

The European project navigates turbulent times, from energy shocks to geopolitical rivalry. In this context, competitiveness is rising as a new policy priority. Yet the EU’s climate ambition remains embedded in law, and the CID does not explicitly conflict with climate objectives.

The real challenge lies in implementation: ensuring economic competitiveness enhances rather than erodes environmental integrity. If European law can evolve to bridge these goals, making climate policy and industrial strategy legally coherent, then net-zero emissions by 2050 might still be within reach. Nevertheless, that will require more than policy speeches. It will demand legal clarity, courageous reform, and an unwavering commitment to the climate promises the EU has made to its citizens, to the planet, and future generations.

Chloé Van den Spiegel is a Master’s Student at the IEE and Communications Manager in Eyes on Europe.