Institut Veblen / Veblen Institute

The EU mirror measure on antibiotics in livestock farming could result in Brazil losing all access to the European market for meat

Mathilde Dupré & Stéphanie Kpenou — 2026-05-13T09:04:18Z

A new ban on the use of growth-promoting antibiotics in livestock farming for meat imported into the EU will enter into force in September 2026, and currently, Brazil is not among the exporting countries able to guarantee compliance with European requirements. The country has been removed from the list, updated on 12 May, of third countries authorised to export meat and animal products to the EU (1).

This mirror measure aimed at combating the scourge of antimicrobial resistance was adopted in 2019 and will only enter into force on 2 September 2026 — more than seven years later (2). The measure extends to operators in third countries exporting animals or products of animal origin to the European Union the prohibition, already applicable within the EU since 2006, on the use of antibiotics as growth promoters in livestock farming. In order to be imported into the EU, animal products must be accompanied by an official certificate of compliance and originate from a third country included on a list of approved third countries (3).

The absence of Brazil from the list published on Tuesday, 12 May by the European authorities of countries currently authorised to export meat to the EU is a real bombshell, coming just days after the start of the provisional application of the EU-Mercosur trade agreement, which is specifically intended to increase these flows of beef and poultry meat in particular.

Brazil can still bring itself into compliance by September. To do so, it will notably have to adopt new rules, monitor their implementation and ensure transparency throughout the value chains of its meat sectors. However, the date from which such changes could trigger a reauthorisation of exports also depends on production timelines for the first animals that have never received antibiotics as growth promoters.

The reactions of the Brazilian authorities are not yet known. The country does, however, have several avenues of recourse to challenge the application of this European text, notably through the rebalancing mechanism of the EU/Mercosur trade agreement, which entered into provisional application on 1 May.

Notes
(1) The list of authorised countries is available at this link.
(2) See the study by the Institut Veblen, When Will Imports of Meat from Animals Doped with Growth-Promoting Antibiotics Finally End?, June 2024.
(3) In addition to the very long delays in the implementation of this mirror measure, the practical arrangements for its implementation have considerably weakened its scope. A first delegated regulation intended to define the conditions for implementation was published on 27 February 2023 (although it should have been adopted before 28 January 2022). This regulation requires imported animal products to be accompanied by an official certificate of compliance with the prohibition laid down in Regulation 2019/6. These products must also originate from a third country or a region of a third country appearing on a list of approved third countries. The first implementing act (published only on 29 January 2024) provides for an obligation on operators in third countries to complete a self-declaration certifying that the meat complies with the prohibition established by European legislation. This obligation will only enter into force as of 3 September 2026. For the measure to become fully applicable, it still remained necessary to update the list of third countries approved to export their animal products to the European Union. Furthermore, the French authorities had long feared that the measure would only cover antibiotics administered as veterinary medicinal products and not as feed additives, which would represent only a tiny fraction of the uses by producers in third countries exporting their meat to the EU. However, the European Commission reportedly confirmed last February that, despite its scope formally relating to veterinary medicinal products, the text would indeed cover both uses.

Money & Finance Programme

2026-05-04T10:52:02Z

"New Approaches in Transition Finance" as a project run our the Money & Finance" Program in coopération with the Chair "Energie & Prospérité" at Institut Louis Bachelier. It is supported by the Charles-Léopold Mayer Foundation and the European Climate Foundation,

Publications and events linked to this project

Members of the working group

Presentation

Conflicts and geopolitical crises serve as a reminder of the need to accelerate the energy transition away from fossil fuel dependency, but the need for massive investment in Europe extends across many other areas: reindustrialisation, climate adaptation, defence, infrastructure, transport… Yet many investments considered strategic are not profitable enough to attract private investors spontaneously; to bridge the gap, the role of "impact finance" remains limited and current banking and financial regulation is not designed to direct financial flows accordingly. All these areas therefore require a variable but significant share of public funding — the latest evaluation report on the France 2030 programme still calls for "a public investment plan in the infrastructure needed for the transition to a low-carbon economy" and for additional support measures for business investment in the decarbonisation of industrial processes.

At the European level, the Savings and Investments Union promises to "unlock" private investment through securitisation and better market integration, without providing instruments to narrow the gap between socio-economic utility and financial profitability, as we analyse in our note « Financing Europe's Strategic Objectives ».

This role therefore falls to public subsidies financed primarily through debt. Yet the room for manoeuvre of states such as France is increasingly constrained by current debt levels and the rules of the Stability Pact. As for the amounts redistributed within the economy through tools such as the ETS system, carbon taxes or energy savings certificates, they represent an important but wholly insufficient source of financing.

The need to invest in the future on one side, warnings about public debt on the other — the financial equation is a difficult one, and calls for a broader debate on financing tools and costs. This project contributes on three fronts:

– Producing proposals for European and national public decision-makers — on reforms to financial instruments, budgetary rules and governance frameworks needed to genuinely direct financing towards strategic objectives.
– Organising the policy debate bringing together researchers, public decision-makers and financing actors, to compare analyses and circulate proposals across academic, institutional and political circles.
– Making these issues accessible to a non-specialist audience: journalists, civil society organisations, and engaged citizens.

Themes

The programme explores four complementary areas:

– The cost of financing and levers for directing flows towards public objectives. What levers does public authority have to direct financial flows — banking and financial regulation, taxation, central bank refinancing, institutional investors, public development banks?

– The effectiveness of blended finance. Public guarantees, green loans, convertible bonds, equity stakes: how can the real impact of these tools be assessed? Is the sharing of risks and gains from "de-risking" equitable between the public and private sectors? How can mobilised volumes be increased while avoiding the privatisation of benefits and the socialisation of risks? See our note « Financing future investments: a political challenge for Europe ».

– Securitisation as an investment lever. Securitisation lies at the heart of the SIU, but was also central to the great financial crisis of 2007-2008. Is it necessary to finance the real economy? What risks does it pose to financial stability? Does "green" securitisation, with conditionalities on the use of freed-up credit capacity, offer a viable model?

– Prudential regulation and productive financing. Do capital requirements really harm banking competitiveness and the financing of productive investment? Or do better-capitalised banks in fact lend more consistently and prove more resilient? We have contributed to this debate in our response to the European Commission's consultation on banking regulation and the competitiveness of the EU banking sector, as well as in our analysis of the easing of capital requirements in the United States.

The full list of publications and events related to the programme is available on the Veblen Institute website.

Financing Europe's strategic objectives

Wojtek Kalinowski — 2026-04-30T09:52:00Z

Insufficient investment in key policy areas impedes the pursuit of EU's objectives and weakens Europe's competitiveness in global markets. Trying to address this problem, the Commission launched in 2025 the Savings and Investment Union as a central piece of its Competitiveness Compass and hoping to channel more credit and savings into productive investments.

But the SIU is not designed to address the underlying reasons for weak investment in areas where financial flows are misaligned with strategic priorities. The only additional EU policy tool proposed for steering financial flows towards political objectives is “blending” private and public funding through the InvestEU fund and the future Competitive Fund. But closing the investment gap will require complementary measures in financial regulation and monetary policy.

This policy brief is a part of the "New approaches in transition finance" project

KEY MESSAGES

• Closing the gap requires steering tools, not only scaling tools. EU's investment shortfall is not primarily a problem of insufficient finance, but of finance that is systematically misaligned with strategic priorities. Many of investments which are highly relevant to EU's policy objectives present risk-return profiles that do not match private investors' expectations.
• The SIUs drive for stronger market integration as about scaling; it promotes the common European market but does little to steer finance towards these investments.
• The same goes for the revival of securitization, a central piece of the SIU. The additional investments promised through banks balance sheet are theoretical and there's no guarantee that they will concern investments of relevance for the EU's policies. In addition, securitization might create new financial risks.
• The SIU missed the opportunity to opt for green securitization with strong conditionalities.
• Measures to improve access to venture capital are important to scale up technological innovation, but these segments do not reflect the overall financing needs of the economy.
• Financing strategic objectives relies therefore on public subsidies and blended finance instruments.
• Complementary measures are necessary and could be deployed in the fields of financial regulation, monetary policy and macroeconomic coordination.

Download "Financing Europe's strategic objectives"

European ISDS Scorecard: a ranking of the harmful effects of 30 countries' investment treaties

Mathilde Dupré — 2026-04-21T22:30:00Z

France ranked among the most active European countries in developing and maintaining the investor–state dispute settlement (ISDS) mechanism.

France ranks as the fourth most active country in Europe in supporting the international investment arbitration regime, according to a new study (1) published by a coalition of eight European organisations, including the Veblen Institute, Powershift and CAN Europe (2). These findings are released on the eve of the first International Conference on Transitioning Away from Fossil Fuels, to be held from 24 to 29 April in Colombia, during which the investor–state dispute settlement (ISDS) system will be examined as a major obstacle to the defossilisation of our economies.

Arbitration tribunals, known as investor–state dispute settlement (ISDS) mechanisms, are provisions embedded in many trade and investment agreements. They allow investors (multinational corporations or individuals) to sue governments before private tribunals outside domestic legal systems over public interest policies — such as environmental protection or public health regulation — that they claim harm their profits, with compensation awards often reaching millions or even billions of euros.

The report entitled “Investment Arbitration Index: A Comparative Analysis of the Harmful Effects of Treaties Across 30 European Countries”, published today alongside an interactive “scoreboard”, ranks 30 European countries (3) to measure the scale of their investment treaty networks, their actual use by investors, and their concrete impacts. The index is based on ten indicators, including the number of agreements signed with ISDS provisions, their use in sensitive sectors such as fossil fuels, and the amounts of compensation claimed and awarded.

The report highlights Europe's pivotal role in the global ISDS architecture and underscores the responsibility of a small group of countries — the United Kingdom, the Netherlands, Germany, France and Switzerland — which account for a significant share of the treaties, disputes and climate risks generated by this opaque system.

The ranking reveals that:

The United Kingdom ranks first among countries responsible for the development and maintenance of ISDS; British investors are particularly active in ISDS proceedings in the mining and fossil fuel sectors.
The Netherlands follows closely behind; Dutch investors (often using shell companies with no substantial economic activity) have initiated more ISDS proceedings than those from any other European country.
France is characterised by treaties covering a large volume of investments linked to future greenhouse gas emissions and containing very long survival clauses. This configuration may constitute a structural obstacle to the adoption of ambitious energy transition policies.
Ireland is the only country with no bilateral investment treaties with other states (although this may soon change if EU trade agreements containing ISDS provisions enter into force) (4), and Norway has already terminated half of its relatively small number of treaties, demonstrating that European countries can choose alternative paths.

The report makes several recommendations:

That European governments stop signing new agreements containing investment protection chapters with ISDS or an Investment Court System mechanism. (4)
That they begin systematically terminating existing treaties. For treaties containing “sunset clauses” — which allow provisions to remain in force for a period often ranging from 10 to 20 years after termination — countries should pursue “coordinated withdrawals” to neutralise them.
That they cooperate with other countries, including outside Europe, to promote a broader exit from the ISDS system.

Examples of cases

The consequences of treaty networks, rooted in post-colonial economic relationships, are felt particularly strongly in countries of the Global South, which are the target of the majority of ISDS claims. France has been the home state of investors in 69 cases; for example, the disputes initiated in 2021 by Vinci against Peru and Chile over the economic effects of public health measures adopted during the pandemic (5).

However, European countries themselves are increasingly targeted by claims, notably in connection with environmental policies. Severgroup and KN Holdings, two investment companies controlled by sanctioned Russian oligarch A. Mordashov, initiated a proceeding against France in 2021 under the France–Russia BIT, seeking €4.5 billion in compensation following the French government's withdrawal of support for the Montagne d'Or open-pit gold mining megaproject in French Guiana. France is also being sued by Russo-Armenian businessman S. Karapetyan, whose villa on the French Riviera was seized amid allegations of money laundering and acting as a nominee for the sanctioned oil and gas giant Gazprom. This case forms part of a recent wave of claims in Europe directly challenging sanctions imposed following Russia's invasion of Ukraine (6).

Santa Marta Conference on Transitioning Away from Fossil Fuels

This publication also comes ahead of the first Conference on Transitioning Away from Fossil Fuels, to be held from 24 to 29 April in Santa Marta, Colombia — a country that has just announced its intention to withdraw from the ISDS system. ISDS is among the central items on the conference agenda, and organisations across Europe are calling on their governments to “seize this opportunity” to plan a coordinated withdrawal from the ISDS regime together with other participating countries (7).

According to Mathilde Dupré, Co-Director of the Veblen Institute:
“This report reveals the responsibility of European countries in establishing and maintaining an investment protection regime that is incompatible with states' current commitments to environmental protection and national security. The termination of intra-EU treaties and withdrawal from the Energy Charter Treaty have only partially reduced the risks that this system poses to our democracies. It is time to address the stock of older treaties held by EU Member States in order to reduce, in parallel, the risks faced by countries in the Global South.”

For Stéphanie Kpenou, Programme Officer for Trade Policy Reform at the Veblen Institute:
“France must seize the major opportunity offered by the upcoming conference in Colombia on transitioning away from fossil fuels to unlock investment protection constraints, starting with this sector.”

Notes

(1) The full report is available in English and French, and the results can be accessed online on this website.
(2) The report is jointly published by the Veblen Institute, Powershift (Germany), Global Justice Now and Trade Justice Movement (UK), TROCA (Portugal), Alliance Sud (Switzerland), CAN Europe and the European Coalition for Just Trade.
(3) The index ranks 30 European countries — the 27 EU Member States plus Norway, Switzerland and the United Kingdom — according to their structural involvement in the ISDS system. It adopts a home-state perspective, examining which treaty networks and economic actors feed the system as sources of ISDS claims. Ten indicators measure different dimensions of this involvement, ranging from the size of a country's treaty network to the number and financial scale of disputes initiated by its investors, as well as the fossil fuel assets covered by those treaties. Raw values were normalised, weighted to produce a composite score, and transformed onto a 0–10 scale, where a higher score indicates greater involvement in the ISDS system. The full methodology is available in the annex to the report.
(4) The EU has recently concluded several agreements containing investment protection chapters, including treaties with Canada, Singapore, Vietnam and Chile, pending ratification by Member States, as well as the EU–Mexico agreement pending ratification at EU level.
(5) See the UNCTAD online France page.
(6) See the report “Frozen Assets, Hot Claims: How Russian Oligarchs and Other Investors Use Investment Arbitration to Challenge Sanctions”, December 2025.
(7) See the Veblen Institute brief on the obstacles posed by investment arbitration to phasing out fossil fuels, published on the occasion of the Santa Marta Conference.

Residues of pesticides banned in the EU in imported food: ending a dangerous and unjust double standard

Mathilde Dupré & Stéphanie Kpenou — 2026-04-21T08:14:23Z

An independent legal opinion commissioned by the Veblen Institute, PAN Europe and foodwatch concludes that the EU practice of allowing residues of banned pesticides in imported food is highly questionable from an EU law perspective.

European consumers are exposed, through their food, to residues of hazardous pesticides banned on our market. Residues of at least 88 pesticide substances not approved in the EU are still allowed in imported products. Of these substances, 13% are classified as carcinogenic, mutagenic and toxic to reproduction (CMR) or as endocrine disruptors. Six PFAS pesticides, known as ‘forever chemicals', are also included among these substances (1).

Currently, when a pesticide is banned in the EU, its residue limits are not automatically lowered. Instead, the Commission sets import tolerances for pesticides used in third countries, or adopts residue limits set at international level by the Codex Alimentarius Commission.

In abriefing note, the three organisations outline the key points of the legal opinion and put forward proposals to address this shortcoming.

The findings confirm that, under the current EU legal provisions, the Commission not only has the power, but also the obligation to stop allowing these residues.

For pesticides banned on public health grounds, the practice of authorising residues of EU-banned pesticides is illegal. Import tolerances cannot apply to substances not authorised in the EU on public health grounds. Allowing such residues is contrary to the MRL Regulation, which requires the automatic deletion of MRLs following the revocation of an active substance in the EU. The EC's practice also breaches fundamental EU principles (the principle of regulatory equivalence and the principle of non-discrimination, which protects EU farmers from unfair competition from third-country producers).

The situation is more complex for pesticides banned on environmental grounds, as the MRL Regulation was originally designed to protect consumers. However, the Commission's recent measures regarding neonicotinoids show that change is possible within the current framework. A revision of the MRL Regulation to include environmental protection would strengthen future action. Furthermore, this regulation should also cover crops intended for animal feed, energy production and ornamental purposes.

The ‘omnibus' simplification package on food and feed safety proposes measures to address this situation. However, the proposal currently on the table is insufficient and largely symbolic. Under this proposal, the vast majority of banned pesticides would continue to enter the EU via food imports. It covers only a limited subset, representing around 22% of EU-banned substances (2). Furthermore, the omnibus significantly weakens the general legal framework governing pesticides and their residues. It is therefore unacceptable as it stands.

To address this long-standing shortcoming, the Omnibus Regulation must introduce a clear and binding obligation on the Commission to automatically ban residues of any pesticide not approved in the EU, regardless of the reason for the ban and for all food products. Any less stringent measure would perpetuate a system that knowingly allows harmful substances to end up on Europeans' plates and undermines the EU's own standards.

Notes
(1) List based on banned and restricted active substances included in the Prior Consent Inform (PIC) Regulation
(2) The Omnibus proposal covers active substances that are Carcinogenic, Mutagenic and Toxic for reproduction (CMR) Categories 1A/1B, Endocrine Disruptors for humans or non-target organism, Persistent Organic Pollutant (POP), Persistent, Bioaccumulative and Toxic (PBT), or very Persistent and very Bioaccumulative (vPvB). We calculated, on the basis of available data, that 20 of the 88 substances meet these criteria. While official lists exist for CMR substances and endocrine disruptors, no equivalent official list of PBT/vPvB substances has been established at EU level. This figure should therefore be treated as an estimate.

Unlocking the Investment Arbitration System to Phase Out Fossil Fuels

Mathilde Dupré & Stéphanie Kpenou — 2026-04-20T13:28:15Z

Investment arbitration is increasingly recognised as an obstacle to the implementation of ambitious climate policies by states. This issue will be on the agenda of the “First Conference on Transitioning Away from Fossil Fuels”, which will take place in Colombia from 24 to 29 April 2026 and will be co-hosted by Colombia and the Netherlands.

In this context, and as part of the consultation on the Brazilian COP Presidency Roadmap entitled “Transitioning Away from Fossil Fuels” (TAFF), the Veblen Institute has prepared this brief to put forward several concrete proposals.

Removing protection for fossil fuel investments is an essential prerequisite to ensure that taxpayers do not bear the excessive costs of the transition by compensating fossil fuel investors — often under valuation methods highly favourable to them — for public policies aimed at phasing out fossil fuels and managing stranded assets.

Such removal of protection does not prejudge the trajectory or pace of the fossil fuel phase-out, which may legitimately vary from one country to another depending on their level of development and degree of dependence on fossil fuels.

In response to the call launched by more than 200 economists and academics, Colombian President Gustavo Petro announced on 23 March his intention to withdraw his country from the investor–state dispute settlement (ISDS) system. European governments should seize the opportunity of the Santa Marta Conference to plan a coordinated exit from the current investment protection regime together with other participating countries.

Europe plays a pivotal role in the global ISDS architecture, particularly a small group of countries — the United Kingdom, the Netherlands, Germany, France and Switzerland — which account for a significant share of the treaties, disputes and climate risks generated by this system. This is what we demonstrate in our “Investment Arbitration Index: A Comparative Analysis of the Harmful Effects of Treaties Across 30 European Countries”, accompanied by an interactive “scoreboard” ranking 30 European countries according to the scale of their respective investment treaty networks, their actual use by investors, and their concrete impacts. The index is based on ten indicators, including the number of ISDS agreements signed, their use in sensitive sectors such as fossil fuels, and the amounts of compensation claimed and awarded.

Call for an EU-wide windfall profit mechanism in response to the energy crisis

Madeleine Péron — 2026-04-16T11:19:50Z

In a letter to EU Commission president von der Leyen, a group of NGOs including Veblen Institute say a windfall profit tax on oil companies is needed to support vulnerable households, industry, and the clean energy transition.

The European Union is once again confronted with a severe energy crisis, driven by war and the escalating geopolitical tensions in the Middle East, with direct consequences for global fossil fuel markets. The first days of the current crisis have already imposed significant additional costs on European economies and citizens, further exacerbating cost-of-living pressures and energy insecurity and cost € billions in additional energy imports. To be precise, in just the first 30 days of the conflict, the EU's fossil fuel import bill has increased by approximately €14 billion.

At the same time, major fossil fuel companies are recording extraordinary billions of euros in excess profits, a substantial portion of them generated within Europe by refiners and distributors.

This situation echoes the circumstances that led to the adoption of Council Regulation (EU) 2022/1854, which introduced a temporary solidarity contribution on excess profits in the fossil fuel sector. That instrument demonstrated both the feasibility and effectiveness of coordinated EU-level action. An assessment by the European Commission calculated that total revenue collection was in the order of €28 billion during the fiscal years of 2022 and 2023.

In light of the current crisis and the EU's long-term climate and security objectives, it is necessary to reintroduce and strengthen such a mechanism at Union level, complementing Member States' efforts, to generate revenues to support vulnerable households, industry, and the clean energy transition.

We therefore call upon the European Commission to:

Propose a renewed EU-wide windfall profit tax, building on Council Regulation (EU) 2022/1854, under Article 122(1) TFEU or an appropriate legal basis, to ensure a coordinated and timely response to the current energy crisis. The design of the solidarity contribution should be strengthened, including by increasing the share of excess profits captured, in order to better reflect the scale of windfall gains observed in the fossil fuel sector and ensure a fair contribution from those benefiting most from the crisis;

Expand the scope of the mechanism to address profits generated by international fossil fuel companies, including those not headquartered in the EU but deriving significant revenues from the European market, exploring all available legal and fiscal instruments to ensure comprehensive coverage;

Ensure that revenues are clearly and transparently earmarked for socially and environmentally beneficial purposes, including targeted support for vulnerable households, investment in energy efficiency, and accelerated deployment of renewable energy and electrification solutions;

Embed the mechanism within a broader strategy to reduce Europe's dependence on fossil fuels, ensuring that crisis response measures are aligned with the EU's climate objectives and contribute to a faster, fairer transition to a clean energy system.

The time has come to put an end to the structural vulnerabilities of Europe's reliance on fossil fuels. A robust, EU-level windfall profit mechanism would not only ensure fairness in times of crisis but also reinforce public trust by demonstrating that extraordinary profits are being redirected towards the common good.

We urge the European Commission and Member States to act swiftly and decisively, and to take into account our recommendations ahead of the package of measures to tackle the energy crisis, to be unveiled on 22 April 2026, as well as ahead of the informal European Council on 23–24 April 2026.

View online : Read our joint letter

Windfall profits in times of crisis : can we tax them all ?

Madeleine Péron — 2026-04-09T08:00:00Z

Join us for the presentation of an upcoming study by the International Tax Observatory, making it a unique moment to bring together cutting-edge research and frontline advocacy around the same policy debate.

In the wake of the conflict in Iran and the de facto closure of the Strait of Hormuz, the world is once again facing an acute energy crisis. Governments are scrambling to craft emergency responses — under far tight fiscal constraints, with mounting pressure from soaring energy costs, and a stark reminder that the transition itself is the long-term answer to this vulnerability.

Among the hard lessons of 2022 looms one glaring failure: the taxation of windfall profits. Energy companies reaped billions during that crisis, yet collective efforts to claw back a fair share fell dramatically short. In France, the windfall tax on oil and gas companies yielded a mere €60 million, while the broader levy on energy producers brought in around €600 million a fraction of the profits at stake, partly due to aggressive tax avoidance strategies that exposed the limits of hastily designed fiscal tools.

What did we learn ? Is it the same this time ? Could we do better ?

This webinar will explore how extractive multinational enterprises allocate windfall profits and how governments can design smarter, faster, and more effective fiscal responses to energy windfalls, balancing crisis urgency, public finance needs, and the demands of the green transition.

We will welcome :

Ninon Moreau-Kastler, Research Fellow at the International Tax Observatory
Gregor Semieniuk, Associate Professor in the School of Public Policy and Department of Economics at the University of Massachusetts Amherst
Bastien Gebel, Policy Officer at Transport & Environment

The webinar wil be hosted by Madeleine Péron, head of program at the Veblen Institute for economic reforms.

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Toward a Sustainable European Industrial Policy: Tools and Levers

Madeleine Péron — 2026-03-18T15:07:15Z

Europe does not have to choose between competitiveness and the environment. It must build its competitiveness on the ecological transition, or it will fail on both fronts.

One year after the Draghi report, the European Commission is embarking on a dangerous path: abandoning the environmental objectives of the Green Deal in the name of short-term competitiveness, while failing to guarantee the Union's strategic autonomy or economic security.

Under the guise of administrative simplification, what is actually taking place is genuine deregulation. The Commission's first measures reflect trade-offs that are systematically unfavourable to the climate, the environment and social justice. The result: Europe is moving no closer to any of its objectives — neither ecological nor economic. The Commission is offering a false choice between competitiveness, economic security and the environment, when an integrated approach is indispensable.

The Draghi report itself called for greater coherence between the Union's economic, trade and financial policies. Yet the European Commission has not yet translated this call into action. Tools already exist to reconcile ecological transition and competitiveness. The current industrial momentum opens a window of opportunity: the European Union is relaxing its competition doctrine and equipping itself with the means for a more strategic economic policy.

This note examines the real coherence and effectiveness of the proposed policy mix, and sets out proposals to enable the European Union to reconcile its climate, environmental and competitiveness objectives.

Six levers for a sustainable European Industrial Policy

1- Steer industrial policy by integrating economic, environmental and social dimensions
2- Make public support conditional on environmental and social criteria
3- Cooperate on European industrial projects aligned with the transition, such as the small electric vehicle
4- Green public procurement to drive industrial transformation
5- Make full use of the new trade defence tools and ambitiously implement all the instruments of the Green Shield (strengthened requirements for access to the EU market)
6- Increase and strategically direct public and private investment

Joint civil society and cities letter on the revision of the CO2 emission standards for cars and vans

2026-03-17T10:13:15Z

Ahead of a meeting of EU Environment Ministers, 34 organisations call for the ambition of the 2030 and 2035 targets to be maintained.

Dear Climate and Environment Ministers of the European Union,

Cars are responsible for 14% of all greenhouse gas emissions in Europe and air pollution is still linked to over 182,000 deaths in the EU per year, according to the European Environment Agency with a strong exposure of the EU population in urban areas. The solution to both climate damage and toxic air pollution is already available and is soon to become the go-to option for consumers to reduce their mobility costs. Light-duty electric vehicles offer the opportunity to cost-effectively replace the polluting internal combustion engine (ICE) and usher in a new era of zero-emission mobility.

For more than a decade, EU CO₂ standards for cars have been the single most effective policy instrument to reduce road transport emissions, improve air quality and drive the transformation of Europe's automotive industry. They are not only a climate tool. They have become the backbone of Europe's industrial strategy for clean mobility, giving direction to investments in electric vehicles, batteries, charging infrastructure and European manufacturing capacity. The clarity and predictability of the targets have triggered unprecedented industrial investments and positioned Europe on the path toward zero-emission mobility. These investments are now trickling down with a renewed perspective for consumers to find affordable electric vehicles, at a time where high prices pushed many of them away from the new car market.

However, despite their proven effectiveness, the EU CO₂ standards for cars and vans have been subjected to sustained pressure from some industries. In December 2025, the European Commission reopened the regulation and proposed a revision that would significantly lower its ambition through the removal of a phase out date and the introduction of multiple new flexibilities. This shift risks weakening one of the EU's most effective climate instruments, jeopardising industrial, societal, and environmental progress made to achieve the EU's competitiveness and resilience objectives. At a time of escalating climate and energy crises, weakening the car CO₂ standards would be a serious mistake that undermines Europe's strategic autonomy and prolongs its dependence on imported fossil fuels.

Overall, flexibilities will lead manufacturers to postpone action, leading to higher emissions and undermining investment certainty in batteries, charging networks and across the e-mobility value chain. The proposed flexibilities open the door to biofuels and e-fuels which have no role in decarbonising cars and vans and should be excluded from the regulation. Averaging compliance over 2030-2032 would, in practice, slow down the electric vehicles market at the moment when it needs to scale up rapidly.

We therefore call on national governments to:

Reject any weakening of the 2030 target ambition to secure rapid mass adoption of electric cars,
Support the end of the sale of new petrol and diesel cars and vans by 2035 to ensure that the regulation remains aligned with the EU's climate and industrial objectives.

Yours sincerely,

T&E, BEUC, Eurocities, Polis, ERS, EEB, International Federation of Pedestrians, VCÖ – Mobilität mit Zukunft (Austria), Bond Beter Leefmilieu (Belgium), Les Chercheurs d'Air (Belgium), Veblen Institute for Economic Reforms (France), Réseau Action Climat (France), Fondation pour la Nature et l'Homme (France), Canopea (France), Germanwatch (Germany), Nabu (Germany), DUH (Germany), Kyoto Club (Italy), Legambiente (Italy), Nuove Ri-Generazioni (Italy), Greenpeace Italia (Italy), Cittadini per l'aria onlus (Italy), Adiconsum (Italy), Forum Disuguaglianze e Diversità (Italy), Natuur & Milieu (Netherlands), Parent in the City Foundation (Poland), Zero (Portugal), Focus Association for sustainable development (Slovenia), Coalition for sustainable transport policies (KTPP) (Slovenia), Ecologistas en Acción (Spain), Fundación Ecología y Desarrollo (ECODES) (Spain), VCS Verkehrs-Club der Schwei (Suisse), LIVE + BREATHE (UK), Mums for Lungs (UK).