A group of industry leaders have called on the European Union (EU) not to diverge from its climate targets, urging a "robust" 90% reduction in emissions by 2040. However, right-wing MEPs and EU leaders could derail the target.
Some 131 European companies, investors and business organisations have written a letter demanding EU institutions "send a vital signal of Europe’s continued commitment to climate neutrality and industrial leadership."
They urge EU countries to align with the European Commission's proposal for a 90% reduction in net greenhouse gas (GHG) emissions, compared to 1990 levels, as announced in July.
The signatories include major economic players such as Coca-Cola, Volvo, IKEA, and EDF, which are part of the University of Cambridge's Corporate Leaders Group (CLG) in support of a climate-neutral economy.
Corporate leaders say that the 90% target keeps the continent on track with the Paris Agreement, while, crucially, ensuring a "clear policy direction, regulatory stability and enabling conditions for industrial reinvestment and innovation."
The EU's Clean Industrial Deal should also be achieved to make the green transition easier while making clean investment more attractive. It should also lead to the creation of lead markets through clear standards, strategic public procurement, and market development for low-carbon goods.
By staying on course, they say the EU could cement its role as a global leader in clean industries, energy efficiency and climate innovation. "Europe cannot afford to lose any frontrunner advantage or repeat past mistakes," the letter reads.
Far-right threat
Indeed, the Commission’s original proposal of the 90% target in July also wants to maintain a clear path for investors, strengthen industrial competitiveness, and reinforce Europe's energy security.
However, the proposal still needs to be debated and agreed upon by both the European Parliament and Member States before becoming law.
With the new European Parliament that was elected in 2024, a wave of anti-climate change MEPs from the far-right are now serving as lawmakers.
The new far-right contingent, backed by the right-wing European People’s Party (EPP), have led attempts to dismantle much of the European Green Deal agreed under the previous Commission led by Ursula von der Leyen.
Far-right MEP Ondřej Knotek from Patriots for Europe (PfE).
Ironically, von der Leyen’s own first-term legacy – the European Green Deal – is being chipped away at in her second term from inside her own party.
Increasingly, the EPP sides with the far-right on a number of topics, including climate change, infuriating the socialists (S&D), the liberals (Renew) and, of course, the European greens (Greens/EFA), who supported her candidacy to lead the European Commission for a second term.
Last July, the plot thickened when Czech MEP Ondřej Knotek, from the far-right ‘Patriots for Europe’ (PfE), was allowed to take the reduction target law as rapporteur, meaning he will get to draft the European Parliament position on the reduction target.
The EPP was accused of not applying its pressure to stop the PfE group from taking the file, while the far-right group itself said it had been allowed by the EPP to seize it to "block it". This was denied by the EU conservative group, but it has not stopped the accusations that the EPP is actively colluding with the far-right on climate change.
Cementworks in Gaurain-Ramecroix, Tournai. Credit: Belga
"Only days after passionate warnings against the far-right from the Commission President, climate deniers have been handed the keys on climate policy," said Renew MEP Gerben-Jan Gerbrandy (D66, The Netherlands) and shadow rapporteur on the emissions reduction proposal, back in July.
German MEP and shadow rapporteur for the Greens/EFA, Lena Schilling, also condemned the decision at the time, saying putting "climate change deniers in powerful negotiating positions is a threat to the fight against the climate crisis."
The PfE group has repeatedly rejected EU policies to curb climate change, calling on the European Commission for "a real reduction in the burden on our enterprises, not only cosmetic changes" in the context of the European Green Deal.
Stability for business
In the European Council, EU leaders such as French President Emmanuel Macron and German Chancellor Friedrich Merz have also been accused of delaying a common positioning on the EU climate target for 2040 until this October.
According to the European Greens, a single veto would now be enough to prevent a clear positioning and prevent successful negotiations with the European Parliament in time before COP30 in November. An urgency procedure, which would have fast-tracked a vote ahead of COP, was also rejected by an EPP-far-right coalition.
Von der Leyen with EPP President Manfred Weber (Germany)
But according to CLG leaders in the letter to EU institutions, "Europe’s predictable climate and energy framework is one of its greatest competitive assets."
"Alongside effective enabling policies – including reaffirming the Emission Trading System timeline, a 90% 2040 climate target would boost confidence and accelerate investment."
Businesses and investors have increasingly expressed frustration at the reversal of the EU's role in tackling climate change that defined President von der Leyen’s previous Commission.
Since 2019, many companies and sectors have invested in clean technologies in Europe, with fast-growing export opportunities (from €20 billion in 2016 to €80 billion last year, according to Bruegel).
Illustration picture shows the paint inspection department during a visit to the Volvo Car Academy and the Volvo Car Gent production site, in Gent, Tuesday 29 August 2023. Credit: Belga / Jonas Roosens
On top of the 40% target, they are calling on the EU to ensure "stable regulation to attract investment and drive industrial renewal and innovation."
They also want to accelerate replacing fossil fuel-driven energy technologies with affordable alternatives powered by electricity. This would lower costs and enhance energy independence, business leaders say.
Moreover, they are calling on the EU to ensure markets drive the demand necessary to scale clean technologies, as well as deploy the circular economy as a strategic asset.
"We’re committed to reaching net zero emissions by 2040, but cannot do it alone – we need strong policy frameworks to support accelerated renewable energy transition and enhanced packaging circularity," said Joe Franses, VP Sustainability, Coca-Cola Europacific Partners.
Director of Corporate Leaders Group Europe, Ursula Woodburn, said there is "enormous support" from businesses and investors across Europe for an effective Clean Industrial Deal – "as this statement shows".
"Globally, there is a technological revolution and many businesses have invested in clean technologies in Europe. Now is the time to support investments and action to strengthen Europe’s industrial edge," Woodburn said.
Signatories include Volvo Cars, INGKA Group (IKEA retailer), Coca-Cola Europacific Partners Ltd, VELUX, Henkel, Fortum, EDF, Signify, Triodos Bank, Aveva, Mirova, the Danish Chamber of Commerce, Vattenfall, Iberdrola, CleanTech Europe, SSAB, and many SMEs, accounting for nearly half of all signatories.
